Pablo Rodriguez
6 min readSep 7, 2019


Businesses Need To Stop Asking How They Can Use Blockchain and Instead Ask If They Need It (Hint — You Probably Don’t)

Blockchain has been hyped as the key to a new future but in reality, its uses are more limited. Source: Pexels

We’re a generation obsessed with technology. AI, VR, Big Data, Crypto, Quantum, and predictive analytics. We’re living through a disruptive digital revolution but sadly, many people are completely missing the point. As business leaders, we’re so blinded by the ‘shiny new thing’ that we often fail to address what is most important: the problem we are all trying to solve. I believe many modern business leaders are addicted to solutions, not problems.

Enter blockchain

The best current example of this is blockchain, which has been hailed as the savior of everything from healthcare to e-commerce. Debate on the potential uses of the technology has overtaken interest in the technology itself.

At its core, blockchain is a 10-year old technology made up of scientific advances that have actually been around for quite some time. These include ‘byzantine fault tolerance algorithms’, used in distributed databases; double encryption mechanisms; and ‘proof of work’ systems used in many secure transactions and anti-spam systems globally. Even the core concept of ‘the ledger’, can be traced back to early Bell Labs patents.

These are all legitimately innovative techniques that have been brought together to form Blockchain. But this incremental progress has created a technology-first, problem-second mindset, which means that Blockchain has fundamentally failed to have a positive impact on the world — Bitcoin being the most mainstream example.

So why is there so much fuss about blockchain?

One of blockchain’s big benefits is decentralization — a turbulent concept in its own right.

The Internet was born as a decentralized network, as early scientists did not know how to build scalability and resilience using a centralized design. Then, the web saw its first form of centralization, with the emergence of web server farms and the concentration of media and content.

The pendulum swung back again, as peer-to-peer systems brought a new wave of decentralization, democratizing file and media distribution to users and communities. But recently, the cloud has allowed centralization to dominate, as indicated by the prominence of companies like AWS and Netflix. Now we see blockchain advocates claiming that decentralization can build an altruistic web where users are truly in control once again.

Decentralization per se. however, is not something that consumers care about. It is simply a design principle. Users have no core view on whether things should be centralized or not. Users are driven by what they want, not how they get it.

We’ve been here before…

Whilst working at Microsoft, I helped facilitate some of the first genuine moves towards decentralization. It was quickly adopted as a technique that allowed people to copy content quickly through networks, at speed, without third-party intervention. Most famously, this technique spilled into file sharing between consumers, allowing users to access content and media they didn’t have access to.

I worked to take distributed P2P file sharing beyond illegal content on Emule and BitTorrent towards fast delivery of legal content. Large legitimate file downloads like security patches and big bits of software, and ultimately, legal media too. But it was at the time that a leader emerged who truly understood the problem rather than the solution — Steve Jobs.

Solving the problem, not forcing the solution

People didn’t want faster Bittorrents. People wanted simpler and easier access to music and content. Apple launched iTunes with $0.99 songs and an iPod to play them on. Overnight, users could build playlists of the songs they wanted with two clicks of a button. It was the answer the users wanted and ultimately put the nail in the coffin for mainstream P2P file sharing.

This is not to say that P2P didn’t go on to have uses. It is still used for distributing faster security patches at Microsoft, and improving security, or scalability using P2P ‘Distributed Hash Table’ techniques in Data Centers. Whilst useful, this is a far cry from the profound ‘transformation of the world’ technology many hoped for.

I believe blockchain will follow a similar fate. A great technology with an aspiration to change the world that will end up simply being a technology enabler at best, or a solution for niche issues.

A closer look at blockchain’s use cases

Most members of the public will be familiar with blockchain, if at all, because it powers bitcoin. But bitcoin adoption has not grown exponentially as first assumed. The enormous price volatility (hitting nearly $20,000 in December 2017 before crashing shortly after) has warned off consumers from using it as a regular payment method. Even for those who invested early there are well-publicised horror stories of huge amounts of money being stolen through a simple password hack.

Serious investors are yet to genuinely adopt any blockchain crypto currencies whilst so many Initial Coin Offerings were found to be inaccurate or entirely fake that the Securities and Exchange Commission set up a fake ICO site to warn people of the dangers. These failures make it difficult to see crypto currencies being adopted widely as they may be solving a problem that most consumers don’t have. You only have to look at the difficulty that challenger banks have had in persuading consumers to move their money and payments from traditional banks — and that’s within a banking system that many consider to be broken.

The big promise of blockchain, particularly for businesses, is that a distributed ledger will create an immutable record of every transaction. With an un-alterable distributed record, there will be no need for inefficient central systems or bodies, and goods and services can be tracked across borders and supply chains with ease. The problem is that this ‘public’ application of blockchain is enormously inefficient and slow. It can’t handle transactions at the same speed as existing systems and takes far more energy to do so — in fact, it’s been estimated that it would take 5,000 nuclear reactors to run Visa, which handles 36,000 transactions every second, on blockchain.

But even if blockchain scalability and efficiency issues could eventually be fixed, and progress is being made, blockchain’s long-term promise to businesses also needs to be examined. Businesses keep private records of every transaction they make. These records are private for a reason, as they provide a lot of information about how the company works, its relationships with other companies, and its strategy. For any transaction, the parties must rely on intermediaries and regulators to protect them and ensure that the transaction is as described. The companies will then update their individual records. The system is inefficient, but allows both parties to keep private what they want to.

Public ledgers will turn this on its head by replicating ledgers across large numbers of identical databases, copying private records into public form. Businesses will understandably be nervous about putting transactional data into a record that they don’t control. Moreover, whilst blockchain promises greater security, stability and transparency, but if compromised by hackers, lost money would be hard to recover since the record is immutable.

The future

Of course, there is a risk that I am being premature in writing blockchain off. As a technology, it is moving beyond simple use cases (like paying for a coffee with bitcoin) to more visionary scenarios like building a Web where no central authority controls your data, or owning digital goods and collectibles that cannot be taken away from you, providing persistency.

If we are to really tackle the big issues of the day then we need to start thinking and doing things differently. We will not change the world by focusing on technological solutions and finding use cases for them. We need to switch to a problem first, technology second mindset.

Over the years, I have led teams of scientists, engineers and creative visionaries who have been hired because they are obsessed with problems, not solutions. So my advice to fellow CEOs and executives? Don’t look for the next blockchain expert. Hire people who understand the problems you’re trying to solve, who could conceive blockchain being part of the solution. The most successful companies will be full of people who are curious and wake up thinking — today I am going to go a bit further on solving that, for everyone.

It may sound grandiose, but I believe it is the only way. Only by taking this problem-first mindset do I think that technology can be used to its full potential to make the world a better place. If anyone has any ideas on how blockchain can do this, I am open to listening!

Pablo founded Alpha, the global innovation facility dedicated to defining and solving big societal problems and democratizing access to new opportunities.



Pablo Rodriguez —



Pablo Rodriguez

Innovator and Computer Scientist | Google [X] Ambassador | Founded Alpha@Telefonica to do Moonshots | AI Author | Vipassana |