{"id":2326,"date":"2018-12-28T12:23:14","date_gmt":"2018-12-28T20:23:14","guid":{"rendered":"http:\/\/intuitblog.com\/?p=2326"},"modified":"2022-11-10T17:08:14","modified_gmt":"2022-11-11T01:08:14","slug":"what-the-early-days-of-the-internet-can-teach-us-about-blockchain","status":"publish","type":"post","link":"https:\/\/www.intuit.com\/blog\/innovative-thinking\/what-the-early-days-of-the-internet-can-teach-us-about-blockchain\/","title":{"rendered":"What the early days of the Internet can teach us about Blockchain"},"content":{"rendered":"

It\u2019s been said that history doesn\u2019t repeat itself but it often rhymes. That\u2019s why so many pundits are drawing parallels between the (r)evolutionary paths of Blockchain and Internet technology.<\/p>\n

My personal experience tells me there are indeed similarities \u2013 and striking differences. Back in the mid-1980s, I had the good fortune to have a front row seat at IBM during the early development of the backbone of the Internet. And, I am lucky to be leading a team that is helping set the strategic course for Blockchain-inspired technology innovation here at Intuit.<\/p>\n

Memories of the early days of the Internet came rushing back recently during the TTI\/Vanguard<\/a> conference in San Francisco when Leonard Kleinrock<\/a> delivered the opening keynote. A member of the Internet Hall of Fame<\/a> and recipient of the National Medal of Science<\/a> and Charles Stark Draper Prize<\/a>, Dr. Kleinrock pioneered the theory behind the foundational technology of packet switching that led to the Internet.\u00a0 More personally, he was also a great inspiration to me, from my PhD dissertation and building on his work to my early days at IBM\u2019s Thomas J. Watson Research Center<\/a>.\u00a0 During the conference, he and I had a chance discuss and agree on parallels between the Internet and Blockchain.<\/p>\n

It was at T.J. Watson in the mid-1980s that I joined a team created by the National Science Foundation to upgrade the backbone for the NSFNET network, a precursor to today\u2019s private sector networks. Created by the NSF as an open, public version of the Department of Defense\u2019s ARPANET, NSFNET had been crushed by exponential traffic growth, ultimately making it virtually unusable. Working together, IBM, MCI, and the MERIT Networks consortium of Michigan Universities accomplished a 800-fold upgrade from 56 kbps to T3(45 Mbps) , removing this critical constraint and allowing the commercial Internet to flourish.<\/p>\n

As I reflect on this formative period of the Internet, I\u2019m struck by the familiar sound of today\u2019s Blockchain conversation, as industry observers hail a revolutionary advance based on an open, decentralized architecture. As with the Internet, there\u2019s tremendous optimism about Blockchain\u2019s considerable promise, as well as considerable hype about its seemingly imminent and ubiquitous impact on modern life. And as with the Internet, much of this breathless enthusiasm is justified\u2014in spirit, at least.<\/p>\n

But there are also significant differences. Unlike Blockchain, the Internet was developed through an altruistic, industry-wide collaboration of smart people solving problems together. It was only through these efforts that we were able to overcome the fragmentation, instability, and inefficiencies that had plagued the Internet\u2019s non-standardized predecessor networks. In today\u2019s frenzied Blockchain world, there\u2019s no such grand collaboration on the horizon. This has major implications for the road ahead.<\/p>\n

So, what will the future of Blockchain look like? Based on my experiences in the early days of the Internet, I\u2019ll offer these three bold predictions for its evolution and timeline.<\/p>\n

Prediction 1: A usable, scalable, global Blockchain is at least a decade away<\/h2>\n

This prediction will come as a disappointment to the many enthusiasts who want to see Blockchain change the world overnight, but it\u2019s a recognition of two important challenges that currently impede that goal: a lack of standards and a technology that for now remains immature.<\/p>\n

The rapidly expanding Blockchain sector encompasses hundreds of open source and proprietary interpretations based on varying coding languages, protocols, consensus mechanisms, and privacy measures. To date, these versions are typically unable to interact or interoperate without translation\u2014greatly undermining efficiency and reliability. Companies are rightly wary of building business around technologies that have yet to be standardized; a converged set of global standards will be critical to widespread Blockchain adoption, commercialization, and integration. This standardization could be either official or de facto; ad hoc organizations are already working to create standard versions of Blockchain and developing technologies such as the Interledger protocol to enable payments between different distributed ledger networks.<\/p>\n

Massive adoption will also depend on solving engineering and design issues around the usability of Blockchain and its related infrastructure. Scalability is a crucial factor. As a Blockchain grows, its rising consumption of storage, bandwidth, and compute can create bottlenecks. If only a few nodes are powerful enough to process a block, we could also see the emergence of centralization, eroding the decentralized architecture that ensures the security of the system. The impregnability of Blockchain has all too readily been taken up as an article of faith; sober due diligence remains essential.<\/p>\n

Prediction 2: Having reached the top of the hype cycle in 2018, we\u2019re now entering a prolonged phase of real innovation<\/h2>\n

The breathless hype around Blockchain has brought an inevitable backlash as disappointing experiments and implementations lead to slowed investment and failed technology providers. In its July 2018 Hype Cycle for Blockchain Technologies<\/a>, Gartner reported that \u201cBlockchain technical capabilities are evolving, but fail to match the extreme hype and are not yet sufficient for mission-critical enterprise use. Blockchain-inspired solutions lead enterprise conversations. The market will traverse the Trough of Disillusionment before significant value is realized.\u201d<\/p>\n

This is a familiar situation for many technologies\u2014including many which have survived to become enterprise mainstays. Indeed, in Gartner\u2019s model, the trough of disillusionment can be followed by the \u201cSlope of Enlightenment\u201d and reach a \u201cPlateau of Productivity.\u201d As portents of doom scare away speculators and dampen expectations, companies will pull back from frivolous investment and force a real focus on customer problems to ensure market viability. This is a crucial aspect of Blockchain\u2019s evolution.<\/p>\n

Prediction 3: Blockchain-inspired technology will simplify the lives of small businesses, accountants, and consumers in 3 \u2013 5 years<\/h2>\n

As Blockchain completes its slog through the Trough of Disillusionment and enters the Plateau of Productivity, we\u2019ll begin to see products and services that validate the enthusiasm and excitement that greeted Blockchain\u2019s emergence. This will be through bits and pieces of technologies inspired by Blockchain. Two areas of particular interest to consumers and small businesses are shared transactions and financial identity.<\/p>\n

Consider the way real estate transactions are handled today. When a buyer is ready to close on a home, funds for the purchase are placed in trust with a middleman such as a bank, incurring a third-party fee and delaying the close. With Blockchain, the parties can make this exchange directly, over the Internet, in a secure and trusted way, without additional cost or delay leveraging pieces of Blockchain technology Similarly, small businesses can reduce friction by sharing information in a more secure and trusted way with new suppliers or financers, and protect themselves against fraudulent transactions and breach of contract.<\/p>\n

Blockchain-inspired technology can also be used to safeguard individuals\u2019 financial identities through the use of strong Blockchains for authentication and reconciliation \u2013 even before the industry arrives at a global standard. Already, this problem is being solved in a fragmented way around the world \u2013 and here at Intuit. In the coming years, encrypted digital identities will replace multiple usernames and passwords, making security experiences both more convenient and more effective. The creation of a self-sovereign identity, fully controlled and personally maintained by the individual, will provide far greater protection against identity theft than traditional identity management systems.<\/p>\n

Bullish on Blockchain<\/h2>\n

All in all, Intuit is excited about Blockchain-inspired technology and eager to bring its transformative benefits to small businesses, accountants and consumers. Industry hype and disillusionment aside, Blockchain technology has the potential to make digital life more seamless, secure, and efficient, a vision that\u2019s well-aligned with our company\u2019s mission to power prosperity.<\/p>\n

Our strategy is to understand, experiment, and innovate its key technologies, eventually adopt it in key products, and leverage it to build a thriving, frictionless ecosystem for our customers and partners.<\/p>\n

Stay tuned.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s been said that history doesn\u2019t repeat itself but it often rhymes. That\u2019s why so many pundits are drawing parallels between the (r)evolutionary paths of Blockchain and Internet technology. My personal experience tells me there are indeed similarities \u2013 and striking differences. Back in the mid-1980s, I had the good fortune to have a front<\/p>\n","protected":false},"author":151418277,"featured_media":2327,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rkv_browse_by_id":0,"rkv_cta_id":0,"rkv_optimize_for_pagespeed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"useModifiedDate":false,"customPublishDate":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[237496403,237496409,237496405],"tags":[1453,21818323],"intuit_collection":[],"intuit_series":[],"coauthors":[237495758,237496056],"class_list":["post-2326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-innovative-thinking","category-tech-innovation","category-thought-leadership","tag-blockchain","tag-data-science"],"yoast_head":"\nWhat the early days of the Internet can teach us about Blockchain - Intuit Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.intuit.com\/blog\/innovative-thinking\/what-the-early-days-of-the-internet-can-teach-us-about-blockchain\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What the early days of the Internet can teach us about Blockchain - Intuit Blog\" \/>\n<meta property=\"og:description\" content=\"It\u2019s been said that history doesn\u2019t repeat itself but it often rhymes. 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