“Most blockchain technology isn’t ready to do things fast on a large scale”
JAXenter: Some people seem to believe that the API economy is set to revolutionize blockchain technology. What’s your take on that?
Ilya Pupko: Blockchain is an incredible technology, but will not work as a solution to any problem on its own. For blockchain technology to be useful, it first must be enabled by APIs, so that it can be consumed by customers or internal users within large companies.
All technology needs a voice, in a figurative sense, and that voice is an API. To package your technology as a product, you need to build an API for it. This is true for many technologies out there that are not even related to blockchain. In the same way, blockchain needs to be packaged with an API in order to be a product.
JAXenter: Why does blockchain need strong APIs?
Ilya Pupko: Without strong APIs, very few people will be able to get value from blockchain technology. APIs empower users to consume this technology.
For example, Bitcoin is already a product in and of itself. Even when it was out there, and people could interact with Bitcoin, it didn’t explode until there was a real marketplace for it. Now there are marketplaces that make it simple to buy and sell Bitcoin and thus it has become incredibly popular, it really did explode. There is packaging now – humanized APIs have been created for it. You can go to a website, register, give your bank account and buy it. That’s an API – just more of a human interface.
Technology without an interface will only appeal to a small niche, which few people will adopt. It’s like selling a product to mom and pop stores and friends versus selling it at Costco. You must have proper packaging and put in a box. In the digital world, APIs are the proper packaging for any technology – including blockchain.
Without strong APIs, very few people will be able to get value from blockchain technology. APIs empower users to consume this technology.
JAXenter: How can blockchain’s evolution spark new applications that measure blockchain to create a better workflow?
Ilya Pupko: This evolution will create a new way to look at certain types of technologies. It provides transparency and ability to track things in a verifiable way. Now that you can apply this capability to different workflows, different industries, it’s getting adopted more and more. It is enabling all kinds of even basic and simple applications and verticals to have more enterprise-level capabilities such as the ability to track, full public transparency, and visibility. It is beyond the initial implementations in the financial sector and even healthcare, now even previously lagging and closed-off real-estate market is “looking at providing verifiable public offerings and bids.
The States are touting safer elections down the road, and blockchain authentication and digital signature offerings are out there, but beyond that, even the manufacturing sector is looking at this technology to allow for an easier and safer way to collaborate. Our patent system has been long thought of as broken in the United States and the world – perhaps blockchain can’t cure that ill, but at least it may help make this many-decades-old problem a little easier to handle.
“Security for blockchain technology cannot be solved within the API space”
JAXenter: Blockchain is still in the Wild West phase of development. How can it evolve past theoretical?
Ilya Pupko: Blockchain seems to be emerging from its Wild West phase. It’s not just one technology, and there are certain types of blockchain technology that are more developed.
Still, there are a couple of key obstacles that most of the technologies associated with blockchain need to overcome in order to deliver broader results. First, until it gets past the hype phase and all of the noise around blockchain dies down, many larger enterprises may not feel comfortable adopting this technology. The second issue is security, which is a crucial phase of development for any new product. When things are starting out, development is agile, mistakes are made and security suffers. Many blockchain technologies are still in this phase and haven’t been vetted, which means they can be very dangerous to implement. Users need more security verification in order to decide which technology is really ready.
Security for blockchain technology cannot be solved within the API space. As the program interface, the API needs to be the most secure because it will be the first to be hit by attackers. If you tell people to connect to this API, then it has to not only offer a secure connection, but it also needs to ensure that the technology behind it is just as secure.
JAXenter: If you were to summarize blockchain’s evolution so far, would you say it’s mostly negative or positive? Is this technology still plagued by scalability concerns and regulatory uncertainty? Or is it “on the road to recovery” from bad publicity and concerns?
Ilya Pupko: Blockchain has spent too long in the hype cycle. So many technologies have developed from this space and a lot of them were not really up to par – they weren’t secure and they weren’t properly designed. It’s hard to see past so much hype to identify the real value of blockchain. The best case scenario is that people will start to gain a reasonable understanding of which problems blockchain is best suited for and which ones it’s not. Unfortunately, it’s just not there yet.
The publicity around this technology shouldn’t be confused for understanding and results. Most of the publicity is too fuzzy and too broadly positive when there are so many ways the existing technology can go sideways. It’s similar to the hype you see around a fad diet that may have some benefits but is talked about as a solution for everything from world hunger to cancer. Regulatory uncertainty is definitely an issue for blockchain as a currency, because the US has export laws around encryption, and this creates legal problems for anyone trying to use this technology internationally.
In the digital world, APIs are the proper packaging for any technology – including blockchain.
As far as scalability, most blockchain technology isn’t ready to do things fast on a large scale. This isn’t an inherent problem with the blockchain approach, but it reflects on the fact that the current blockchain technologies were not designed to be high-performance systems.
JAXenter: What are the most common mistakes blockchain beginners make? What should be avoided when going down the blockchain path?
Ilya Pupko: The most common mistake beginners can make with blockchain, as with anything else out there, is not learning enough about the particular incarnation of the technology before putting it to use.
Users need to know whether the particular thing they are choosing has been developed to the level at which they need to deliver the performance they expect. Just because it is out there, it doesn’t mean that it is ready for real use.