Buzz Words That Suck: "Blockchain"
“You keep using that word. I do not think it means what you think it means.”
I'm prefacing this post with a very important note: We believe there may be some very positive and valid uses for Blockchain. We believe that Blockchain as a technology has a definite future and that the concept of "microcurrency" may be a crucial next step to the evolution of doing business on the Internet. However, what the final technology of Blockchain will end up looking like, or if there will be a multitude of Blockchain-enabling technologies, feels very nebulous to our thinking at this point. That said...
Photo by Fabian Blank on Unsplash
Will the mere fact that the title of this blog post is "Blockchain" (and the number of times I plan to use the word itself within the post) raise Raika's stock? Our cache? Our hits on Google? Our ranking on Google?
The problem with this buzz word is that simply using it (not implementing it, or innovating with it, or even proving knowledge of what it means) seems to be an easy and near-instant way to raise the stock of any company on the planet.
A British company added "Blockchain" to its name, and its stock price rose 394% overnight, according to Bloomberg. The Verge reports that Kodak created its own coin and saw a 60% jump in the same day. There are countless other examples of the same thing. Really, I urge you to Google this for 5 minutes and see if you don't find at least 100 other examples.
So did the British company actually MAKE anything? Has Kodak actually launched a product in the market that is helping owners of photographs protect their work? Nope. They just announced they are going to be focusing work in that area. Nothing produced, simply an announcement of intent.
I remember another time in (not-so-distant) history when simply using a word meant investors rushed to your side with money, free lunch everyday and foosball tables in your brand new loft space. And everyone said, "Produce something? Make money? No need to worry about that now." It was the late 1990's and early 2000's, and the word was "start-up". Investors couldn't spend their money fast enough to get a piece of the start-up pie, and the end result was the burst of the Dot-Com bubble, sometimes referred to as the "Dot-Bomb". Lots of people lost lots of money because they invested in something they didn't understand, many times an idea that didn't have a mature business plan or revenue model, and without caring whether anything real was being done or not.
Am I wrong to draw parallels between the Dot-Com bubble and the Blockchain surge, as I'm so affectionately coining it? (See what I did there??) I don't think they are as different as you might believe at first blush. Investors are pouring money into companies at the mere mention of Blockchain, and most people, if they were honest, would have to admit that they don't really understand what Blockchain is or how it works. This isn't because they are stupid, it's because it's so new and so fresh to the world that it hasn't really hardened into something tangible and well-adopted yet.
Some will say that is only this writer's opinion, and I'll allow for that, to a point. And that point is this: I sat at a dinner table with a man I know to be very smart, and a very savvy investor, who is well-connected across the United States, who spent a shockingly long time trying to convince me that Bitcoin is an actual, physical coin I could hold in my hand. This same gentleman had to admit after a much shorter period of time that he didn't really understand Blockchain, but rapidly said he would still invest in it anyway because "it's the future". HUH?
I long for the days when the most basic investment advice was still king: Don't invest in what you don't understand. I do believe that a transactional security mechanism could (and likely will) be how we ensure safe, reliable web-based, monetary interactions in the future. But this technology is relatively new, largely untested in the way that traditional transactional methodologies have been, and still hasn't found its final place in the grand scheme of banking and trade. And it definitely is not mature enough to make a 60-400% single-day jump in the value of a company's stock into real, meaningful growth, simply at the mere mention of pursuit of it.
Just my $0.02. Or my 0.000001 XBT.
By: Cynthia Delaria, CEO/COO @ Raika Technologies, LLC