DON’T ASK HOW MUCH GOLD YOU WILL DIG UP, ASK THE PRICE OF THE SHOVEL

The gold rush of the 1850s in the American West saw many lucky prospectors strike it rich and make their fortune. But very few of those who got lucky were digging for gold. It wasn’t the miners who made it big, it was the people who sold the shovels.

Today’s tech gold rush is in cryptocurrencies, or it was, or it will be. Well, who knows? The world goes crazy as bitcoin follows a hyperbolic trajectory and then shrieks with horror as it takes a roller coaster plunge again. Right now, as I type, the news is all about the original cryptocurrency hitting its lowest point since … well whatever, it’s not that interesting.

What is interesting, to this blogger at least, is what it costs to mine for the last few remaining bitcoins. Digging up one of these digital diamonds requires an awful lot of processor grunt, which generates plenty of heat (cue endless puns about bitcoin and hot air, etc). Thus, dedicated mining computers, which look more like components of an industrial HVAC system than the sleek, seductive consumer tech we’ve come to surround ourselves with, are now the prospector’s must-have gadget, and, man, they are expensive.

You’ll get a decent box for about $10,000, but one isn’t going to cut much crypto mustard. No, you need a bank of them, and some serious air conditioning, not to mention custom-built racking and power feeds.

Seems like a familiar tale, except the shovels are a lot pricier and the rewards even harder to predict. You might invest in a suite of mining machines and dedicate enormous processing power to solving obscure mathematical problems in the hunt for elusive hash keys only to find that the gold you uncover is suddenly no longer in demand. At least gold, element 79, has a track record of steadily increasing in value. With cryptocurrencies, who knows?

Some will make a mint in this gold rush, others will lose everything and for the rest of us, as in the 1850s, things will pretty much go on as normal.

Except, as in the 1850s, the society of the future may well be shaped by those outlier activities.

One such development is this thing called blockchain. Massively overhyped, minimally understood but nevertheless quite interesting, the technology that makes bitcoin possible (actually the technology that was created to make bitcoin possible) may be something that will permeate our lives in years to come.

And because of that there is another tech gold rush underway. Blockchain, blockchain, blockchain. It’s at every conference, on every website and mentioned in every discussion about business technology and software.

Ask anyone in the industry what role blockchain will play in the future of supply chain and procurement and you’ll likely get an answer that includes the phrases “traceability” and “conflict minerals," as if that’s all we’re interested in. The truth is nobody knows. As software companies fall over each other to make coherent statements about their blockchain development plans the odor of the bull is overpowering.

That is because blockchain just isn’t that kind of technology. It isn’t like artificial intelligence in all its many guises, or driverless cars or whatever. You can’t just DO something with blockchain. It’s more like a foundation, a fundamental layer on which you might build the capabilities to do certain things.

Clever and sophisticated it might be, but blockchain has nothing to say about what those capabilities might be. If it were possible to retrofit blockchain to today’s procurement and supply chain software (and it isn’t), the resulting system would permit us to do precisely, exactly nothing that we cannot already do today.

Rushing today to get deeply in bed with blockchain as the next big thing is likely to be a fool’s errand. Blockchain will probably emerge as a fundamental element of the infrastructure that powers the next generation of business apps, as important, and yet as invisible as the internet protocol, extensible markup language, secure socket layers and the Cisco router, all technologies without which nothing would work, and yet which we neither notice nor care about.

So, does that mean we should ignore blockchain?

No. The point, surely, is that by stimulating the imagination to consider what a blockchain-based future might look like, we can start to contemplate those capabilities which aren’t possible today. That is the core of transformation, that is where the future lies. Doing things differently.

So when someone offers you a blockchain-shaped shovel promising untold riches, consider who’s getting the better part of the deal. Especially, as everybody knows, you can’t mine gold with a shovel.