After Blockchain fades, then what ?

Wes Boudville
4 min readNov 4, 2018

Let’s step back from the buzz about the current market caps of the cryptocoins and take a strategic look at their prospects. You may have heard “experts” opine that we need the day when blockchain fades into background. Then cryptos can come into their own and find broad and varied uses. In other words, people will earn and hold and spend their coins without knowing or caring that these run on blockchains. “Everything changes”. (I keeping hearing this by true believers.)

Well suppose blockchains fade into background. We can look at existing real world examples to guide what might happen. Decades of data.

Heard of Augur? It recently opened after 2 years in development. (Late.) A “decentralized oracle and prediction market platform”. Hyped to be a killer app for blockchain. After the initial week, volume collapsed, though granted these are early days.

Heard of the Iowa Electronic Markets ? A prediction and futures market that runs on conventional databases. The IEM and its predecessor have been going since the 1990s. Over 20 years in operation. Quite successful, but it has not set the world on fire. If you haven’t heard about it, that’s the point. Maybe you just turned to that Wikipedia article and saw that it is limited to small bets. Yes. But if there had been huge demand for its markets by users wanting to make real money, there would have been competing for profit markets arisen before today to assuage. Never happened.

ICOs offer a token. Users get tokens if they do certain tasks, and tokens can be exchanged for goods and services. Just like a currency. Remember beenz and flooz? These were dot com websites with tokens. A user went to the website and looked at ads. She answers simple questions to prove she read an ad. If she is correct, she gets some beenz or flooz. When she accrues enough, she turns them in for US dollars. Sounds familiar to a typical ICO? Those sites failed. A competitor, Cybergold, did moderately well and was bought out.

Now consider airline miles/kilometers. Sometime in the 60s/70s, airlines let you buy extra miles with dollars. The miles in your airline account were a synthetic quasi currency. Very successful. Most large airlines quickly adopted this, as a means for them to get paid first by you, before you used up the miles in actual travel. So successful that airlines searched for ways to get you to buy more miles. In 40 years, there have only been 2 significant other uses. Hotels. Car rental. Logical extensions of what you’d need if you flew somewhere.

This is a global success. But even this has the use cases of its token very circumscribed. It did not set the world on fire. Despite best efforts of airlines to find other markets for the miles. Imagine that synthetic airline miles did not exist. Maybe some would fly less, stay at hotels less. But the world as we know it would still exist.

At this point some reader is going to say those examples are not run on blockchains. But if blockchains go into background, users don’t care, remember? Read that page for the Iowa Electronic Market. Notice how it does not say anything about the hardware and databases. Irrelevant to most users. If you go to an airline site and look up their frequent travelers program, it probably does not segue to describing the databases either.

But maybe the reader persists. She says the examples don’t have the advantages of running on blockchain. Really? It cannot be speed. A credit card transaction takes 3–4 seconds on conventional databases. It takes 1 hour to write a Bitcoin transaction. 1000 times slower. And please don’t cite the Second Layer proposals to speed up a blockchain. Estimates at a recent workshop suggest at least 2 years before a working system that “might” be faster. Yes, some smart people are working on this. But the 2 year estimate tells something about the level of difficulty, with no guarantee of success.

Is it redundancy? A blockchain could have 5000 nodes. An airline might only have a few (3 or so) data centers. But the extra redundancy of a blockchain is irrelevant except under the most grievous circumstances. An event that can take out most data centers would be so catastrophic. Global nuclear war or a pandemic beggaring the memory of AIDS. Electronics would likely fail widely, and tokens are a pure electronic currency. Survivalist time, using specie (gold and silver coins).

Lastly, we now have actual data on cryptocoins. The fascinating site deadcoins has a list of tokens (aka coins) that went out of business. Currently 900 dead. Out of some 2000 ICOs. Which does not mean that the remaining 1100 coins are a success. They just have not failed yet. But you can be sure that each failed coin had an ICO with a pretty whitepaper about the ingenious ways its token could be used. In the end, no demand.

But at this time blockchains have scarcely faded into the background. Those who used the dead coins probably knew (some vague thing) about blockchains being used to power the coins. This is not a representative sample of the public. These users were supporters of crypto. If coins could fail with this audience, what does it say?



Wes Boudville

Inventor. 23 granted US patents on AR/VR/Metaverse . Founded for mobile brands for users. Linket competes against Twitch and YouTube. PhD physics.