Time for the blockchain to deliver

It’s been fascinating to watch the blockchain hype cycle. Eighteen months ago, you could not move for companies signing up to blockchain projects and industry initiatives. It felt like you were never more than 100 meters from a blockchain related conference, any day of the week, anywhere in the world. No technology could have lived up to the buzz.

Prior to the rise of Covid-19, it seemed to have gone the other way. There were a flurry of articles asking whatever happened to the blockchain, why the revolution didn’t happen and why so many companies got involved in something that still hasn’t delivered.

The point is though, away from the spotlight, the vast majority of companies are still involved, the revolution is being developed and the potential of the blockchain has not even remotely gone away. We are simply at a point in the development cycle where projects have got their heads down and are working on delivery.

Short attention span versus complex projects

The bottom line is that blockchain projects are often complex, and the systems and bureaucracies that they are attempting to enhance are also complex. Marrying these two truths while ensuring security, transparency, credibility and regulatory compliance takes time and diligence.

It is likely to be worth the effort however. Despite the challenges that cryptocurrencies have faced and changing focus of the global media agenda, the potential of the blockchain is undiminished.

Take the example of the oil and gas sector.

Like many stable industries that have developed over the last century, oil and gas is backed up by a complicated, some might even say convoluted, bureaucracy. In many ways, this is as it should be. Given that natural resources are often extracted from some of the less politically stable areas of the world, there needs to be a system in place that keeps track of what is being produced, where and by whom, and that system is always likely to be complex. Even without the political aspect, the process of moving natural resources from the ground through the refinement process and to the point of delivery involves many different people doing many different, unrelated and often complicated things.

Reinvigorating oil and gas supply

The level of complexity means that the system we currently have in place has the potential to be circumvented. Where this happens, governments and the people they are supposed to represent don’t get the benefits of the resources that they should be due.

A transparent, efficient blockchain system could change this, making it simple to keep track of the provenance of a shipment of oil or gas right the way from the ground to the pump or plug. Because it’s a non-centralised system, there would be less risk of interference at any point in the cycle, so the correct tariffs could be imposed and paid automatically and with the minimum of fuss. Complying with the regulations and tariffs could become cheaper than trying to circumvent them.

Reinvigorating the system in this way would make it far simpler to show where projects at any point in the extraction cycle were being run efficiently. It would also help manage supply effectively and make sure that waste is kept to a minimum. This could go some way to assuaging some of the environmental concerns that have put the industry under scrutiny over the last few years.

The hype around the blockchain certainly died down, and that was a good thing, because it gave projects an opportunity to focus on their development. The likelihood is that in a decade’s time, we will suddenly realise that the blockchain is integrated with our day-to-day lives and has massively and irrevocably enhanced the way that many of our industries work. We will probably look back and wonder what all the fuss was about.

About PermianChain
PermianChain is a proprietary technology platform that brings together the crypto-mining and oil and gas sectors. Using a permissioned access blockchain, PermianChain makes it possible to utilise stranded and wasted energy resources, unlocking liquidity and transforming the way that oil and gas projects are funded, produced, bought and sold. Established in 2018, PermianChain Technologies is a pioneer member of the Blockchain Research Institute (BRI) and start-up member of the Petroleum Technology Alliance Canada (PTAC).