Blockchain: Beware of the crypto-hype

December 2018

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This article was originally published in ITNOW, Volume 60, Issue 4, Pages 22–23, 1 December 2018,  by © 2018 The British Computer Society.

Dr. Stephen Castell explains why IT professionals need to watch out for crypto-hype and be alert to the problems ahead.

There is currently a crypto-algorithmic blockchain technology mania. Huge amounts of money, commentary, thought, ink and new paper column inches are being lavished on blockchain based technologies such as cryptocurrencies, smart contracts and distributed ledgers.

It seems almost every millennial is involved with an initial coin offering (ICO) or initial token offering (ITO). A few of these may prove to be commercially successful. They may establish a new crypto-economic paradigm. I wish these crypto-enthusiast millennials well. Indeed, I have dubbed crypto the millennials’ rock’n’roll.

I, myself, suggested just such a new, disintermediated wholly digital cash currency, in a letter published in Computing magazine, July 1995: ‘... As cyber trading grows, the new, powerful common electronic trading currency will be ‘owned’ by no single physical nation state, central bank institution, economic or political grouping. We could ... call it the ECU..., ... the Electronic Cash Unit.’

Returning to now, most agree that, in order to protect consumers and investors, this new blockchain-based digital economy is in need of some regulation. The Delta Summit was held in Malta in early October 2018. In front of 4,000 attendees, Dr Joseph Muscat, Malta’s Prime Minister, announced three new acts positioning his EU island as a leader in regulating blockchain applications, ICOs, cryptocurrency trading and, more widely, digital innovation. These acts were:

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