After spending $700 000 Australian dollars investigating the industrial potential of blockchain, Australia’s Digital Transformation Agency (DTA) has determined that current versions of the tech are “interesting” but in no way better than other systems, ZDNet reports.
DTA Chief Digital Officer Peter Alexander reportedly told Senate Estimates on Tuesday:
“Blockchain is an interesting technology that would well worth being observed but without standardisation and a lot of work to come — for every use of blockchain you would consider today, there is a better technology — alternate databases, secure connections, standardised API engagement.”
He added that the tech is now, “kind of at the top of a hype cycle.”
Blockchain, a type of distributed database inspired by Bitcoin, has been the subject of much excitement in part because it can and has often been used to issue ICOs (initial coin offerings), which critics have argued are thinly-veiled securities.
Companies have raised billions by ICO while touting the “revolutionary” capacities of their blockchains, and broad public understanding of the tech has arguably lagged far behind marketing-induced exuberance.
But beneath the glorious futurist claims there have emerged, over the past year or so, quiet but persistent stories of rising skepticism regarding blockchain tech, including news that large corporate participants have been walking away from membership renewals at blockchain consortia like R3.
Financial Review also reported this week that bankers at the country’s annual Sibos conference dismissed blockchain this week as so far inferior to and lagging behind rapidly advancing payment systems like SWIFT.
Reserve Bank of Australia Assistant Governor Michelle Bullock also told conference-goers that she is, “…not convinced that (a national cryptocurrency built on blockchain) has a use.”
The DTA’s Alexander has also reportedly suggested that governments have no use for cultivating or sustaining the type of low trust payment relationship permitted by the Bitcoin network.
Bitcoin was released by cypherpunks ten years ago as an experiment in creating a payment network that cannot be censured by any single jursidictional authority.
This feature that has so far made Bitcoin popular with investing “contrarians” like Peter Thiel as well as people suspicious of or directly oppressed by various states.
As far as private business is concerned, however, Alexander believes their interest in the tech is primarily about boosting sales:
“I think it would be fair to say a lot of big vendors, and technology vendors, are pushing blockchain very hard, they see sales opportunity in it…So internationally, most of the hype around it is from vendors and companies, not from governments, or users and deliverers of services who are saying ‘blockchain is the solution to our problem’.”
Alexander qualified this by stating that many vendor intentions have not been deliberately dishonest. “It’s not that we don’t trust any of the vendors — that would be an unfair characterisation — we trust the vendors, but note that the motivation is generally sales and making revenue.”
Meanwhile, several Australian companies, government and innovation agencies have announced they are testing blockchain to see if they make various government services more efficient.
Australia’s disability insurance scheme (NDIS) is now testing a blockchain system to administer disability payouts.
As well, the Australian region of New South Wales has also been testing a blockchain-based system for hosting drivers’ licenses and records that will enable participants to display licenses on their phones at pubs and road checks for instance.
When speaking about the pilot, Santosh Devaraj, CEO of Secure Logic, the company providing the blockchain tech undergirding the proposed licnesing system, said current systems are, “mistake-prone, time-consuming, expensive, and impractical ways to offer services.”