The Blockchain Panacea is the tendency for developers to attach the blockchain to technologies that either don’t need it to function effectively or to ideas that haven’t worked in the past with the expectation that the blockchain can somehow make them viable.
The blockchain and decentralized digital assets solve specific problems very well, but they are not a panacea.
Blockchain overreach is a bigger problem for Ethereum than XRP, but it seems like Ripple is also stretching itself into a hundred different directions and potential blockchain “use cases.” Ripple’s investments are more focused than the slapdash, haphazard, blind man throwing mud against a wall and seeing what sticks free-for-all that Ethereum tokens are. Still, there are certain Xpring investments that seem like bad ideas. The folding of the peer to peer rental service Omni, one of Ripple’s early Xpring investments, didn’t surprise me in the least.
Blockchain projects have a big problem with attaching the technology to bad ideas and expecting them to suddenly be lucrative, as though decentralization is a panacea that will make an idea that no one wanted before suddenly desirable. One glance at the grand variety and number of different Ethereum tokens should provide immediate examples of projects that fit this category. Many are blatant cash grabs, and even more are attempts to polish unwanted business models to make them desirable with blockchain.
The point of these projects is always to make money. I suppose this makes me a cynic, but the majority of these tokens are not labors of love. The profit model is paramount. Ripple may be creating a similar kind of problem as the one found on the Ethereum blockchain.
The amount of money Ripple is offering to spark XRP adoption amongst businesses is bound to attract some lemons. My concern with many of the Xpring projects is that, with how dubious and scammy blockchain projects can be, the kinds of businesses that would want to integrate blockchain tech into their companies are the sort that are already having trouble with sustainable business models. That’s not to say the Xpring project is a bad idea as a tool to spark development, but the community needs to temper its expectations with the viability of these projects. Some may succeed, and while Ripple is applying a measure of selection to their investments by vetting these projects, many will no doubt fail. Ripple’s tech has the potential to transform certain industries, but it is not a magical solution that will make a bad idea work.
Header Photo by Willian Justen de Vasconcellos