Why IBM's Blockchain Isn't a Real Blockchain

IBM is a major player in the world of enterprise blockchain, offering a blockchain platform based on Hyperledger Fabric and launching blockchain pilots with large companies like Walmart and Aetna.

As one of many contributors to the nonprofit, the open source Hyperledger Foundation, IBM has made a huge investment in promoting Fabric as a private or "Permissioned" blockchain, implying that it offers features in common with well-known blockchains like Bitcoin or Ethereum, while somehow removing any aspects that might be "Unsuitable for enterprise."

The technology IBM is actually selling and calling "Blockchain" - i.e., Hyperledger Fabric - sacrifices the most important features of a true blockchain, whether permissioned or public.

While my colleagues and I don't see the numbers game as the only factor in blockchain adoption, we do think it's important to educate people on what a blockchain is and is not.

In order to really understand where IBM's blockchain stands, we need to look at the very definition of a blockchain itself.

IBM's definition of blockchain captures the distributed and immutable elements of blockchain but conveniently leaves out decentralized consensus - that's because Hyperledger Fabric doesn't require a true consensus mechanism at all.

When the stakes are as high as in blockchain - where millions of dollars can be lost if the code is buggy or incorrect because it wasn't designed for blockchain - the smart contract language must be purpose-built and safe by design.

Increasingly, the most sophisticated observers of blockchain ecosystems are realizing that private and public blockchains will not exist in a vacuum but instead will want to work together: A private network will want to make a token available to consumers on a public blockchain, and a public blockchain's decentralized application will want to store sensitive information on a private blockchain.

As IBM dominates a lot of the enterprise blockchain press cycle with its announcements of partnerships, it is important to look under the hood at what the technology can actually do.

IBM's "Blockchain" technology falls short in numerous ways - including security, performance and reliability - and as such, provides an inferior solution for organizations looking to use blockchain to achieve meaningful business improvements.