Research Study: 'No Evidence of Success' for Blockchain-based Solutions

Blockchain technology may have some legitimate use cases - including supply chain management and document authentication. However, a recent study of 43 different solutions proposed for the international development sector found “no evidence of success.”

John Burg, a fellow at the Agency for International Development (USAID), was unable to instances where blockchain technology was being used by agencies and contractors or non-governmental organizations (NGOs).

Commenting on the lack of evidence of real-world use cases for blockchain tech, Burg said: 

We found a proliferation of press releases, white papers, and persuasively written articles. However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.

"No One Was Willing To Share Data"

Interestingly, Burg and his team of researchers learned that blockchain-related firms or initiatives were unable to back their claims regarding the benefits of using distributed ledger technology (DLT) with proof of working and useful products or services.

Burg revealed: 

We fared no better when we reached out directly to several blockchain firms, via email, phone, and in person. Not one was willing to share data on program results, MERL [monitoring, evaluation, research and learning] processes, or adaptive management for potential scale-up. Despite all the hype about how blockchain will bring unheralded transparency to processes and operations in low-trust environments, the industry is itself opaque.

Salaries For Blockchain Developers In China Drop By 50%

Until recently, Burg had been a supporter of blockchain technology - as he noted in one of his previous blog posts:

Blockchain is like a loom that can weave together multiple strands of separate things ... into an integrated fabric where you can see what the data means and adjust resources in response.

Notably, Burg is not the only one who has been critical of blockchain - as Eddie Hughes, a member of the UK parliament, told the Financial Times:

I'm just a Brummie bloke who kept hearing about blockchain, read a bit about it, and thought: this is interesting stuff. So I came up with this idea: blockchain for Bloxwich.

As CryptoGlobe reported recently, salaries for DLT developers in China have dropped by 50% - which may be due to a sharp decline in the prices of blockchain-based digital assets. However, giant Chinese IT firms including Tencent, Alibaba, and Baidu are still actively looking for experienced developers who can create blockchain-based software applications. This, according to job listings on large recruitment websites in China.

Amazon Managed Blockchain 

Although blockchain tech cannot be applied to solve every problem, it does not necessarily mean that it has no potential use cases. In fact, Amazon Inc., the world’s largest internet-based firm by revenue, has launched a product called Amazon Managed Blockchain. The solution allows users to set up and manage scalable blockchain networks.

PTYX, one of the developers involved with the ChainZilla project, a blockchain-as-a-service (BaaS) and initial coin offerings (ICO) management platform, recently said:

We can offer Amazon services. They are a Komodo (another major BaaS provider) competitors indeed. They are making the deployment of the networks even easier for us. I mentioned it the other day. Putting software on AWS is fine, but at the end of the day, Amazon wants to take away your business. All of these blockchain platforms launching on AWS have given them enough feedback to create something simple to use and understand.

38% of Crypto Exchanges Interact With High-Risk Entities in 25% or More of Their Transactions

Leading cryptoasset data provider CryptoCompare has published an updated version of its cryptocurrency Exchange Benchmark. The report details that 38% of crypto exchanges interact with high-risk entities in 25% or more of their transactions.

According to CryptoCompare’s Exchange Benchmark, interactions with high-risk entities are considered when the cryptoasset data provider is raking exchanges. These interactions are measured according to CipherTrace’s Interaction Risk Score, which profiles transactional risk by “deanonymizing risky entities and illicit activities to identify criminal sources of funds and money laundering exposure.”

CryptoCompare then scores exchanges according to the percentage of transactions conducted with entities deemed high-risk. These include criminals, darknet markets and vendors, gambling projects, malware operators, cryptocurrency mixers, ransomware operators, and OFAC sanctions addresses.

The benchmark details that addresses with up to 25% of transactions conducted with these entities receive some points, but those above said mark receive none. Notably, 38% of cryptoasset exchanges were above it.

Data shared in the report detailed that Top-Tier cryptoasset exchanges, those graded AA to B in the report, interact less with these entities, while Lower-Tier exchanges, those rated C-E, interacted more. While both AA-related exchanges, Coinbase and Gemini, had no interactions with high-risk entities, some of the exchanges with A, BB, and B ratings did.

As CryptoGlobe reported, the Exchange Benchmark also revealed Top-Tier exchanges are gaining market share against Lower-Tier exchanges. It details that top-tier exchanges accounted for 32% of the global volumes in Q4 2019, while in the first quarter of this year they accounted for 36%.

In the second quarter of 2020, the Top-Tier exchanges already accounted for 40% of the global trading volume. In June these exchanges got to a 46% market share. Lower-Tier Exchanges, have seen their share of the space’s total trading volume drop from 68% to 60% in the last three quarters.

Featured image via Pixabay.