I've sat through seven Web3 pitches this year. Blockchain for supply chain. NFTs for loyalty programmes. DAOs for governance. Smart contracts for insurance claims. Each presentation was slick, the demos were impressive, and the enterprise use case fell apart within three questions. I think the technology is genuinely interesting. I also think 90% of the enterprise applications being pitched right now are solutions looking for problems.
What Web3 Actually Is
Let's strip away the marketing and talk about what's actually on the table.
Blockchain is a distributed, append-only ledger. Transactions are recorded in a way that's resistant to tampering. Multiple parties can verify the same data without trusting a central authority. That's the core innovation and it's real.
Smart contracts are programs that execute automatically when conditions are met. They run on the blockchain and their execution is verifiable. In theory, this eliminates the need for intermediaries in certain transactions.
Decentralised applications (dApps) are applications where the logic and data live on a blockchain rather than a central server. Users interact with them through wallets rather than accounts.
NFTs are unique digital tokens on a blockchain that represent ownership of something - currently mostly digital art, but theoretically anything.
Each of these is technically interesting. The question is whether they solve real enterprise problems better than existing solutions.
Where the Pitch Falls Apart
Supply Chain Traceability
The most common enterprise Web3 pitch. "Put your supply chain on the blockchain for end-to-end transparency." The demo shows a tomato being tracked from farm to shelf with every handoff recorded immutably.
The problem: the blockchain records what people tell it. If someone at the farm enters false data, the blockchain faithfully records false data immutably. "Garbage in, immutable garbage out" is not an improvement over "garbage in, garbage out."
Real supply chain traceability requires sensor integration, physical verification, and process discipline. The database technology is the least important part. A well-designed PostgreSQL database with proper access controls provides the same traceability for a fraction of the cost and complexity.
Smart Contracts for Insurance
"Automate claims processing with smart contracts." The demo shows a flight delay claim being automatically paid when the flight data confirms a delay.
For that specific, narrow, perfectly-defined scenario, it works. For the 95% of insurance claims that involve ambiguity, human judgement, documentation review, and discretion - it doesn't. Insurance claims are complex precisely because the conditions aren't binary. "Was the damage caused by the covered event?" is a question that requires interpretation, not code execution.
Smart contracts work beautifully when the conditions are objective and binary. The gap between the demo and reality is where the entire business case lives.
Isaac Rolfe
Managing Director
NFTs for Loyalty Programmes
"Give customers NFTs instead of loyalty points." Why? What does the customer gain from their loyalty points being on a blockchain? They can't spend NFTs at other stores (interoperability doesn't exist yet in practice). They don't care about the underlying technology. They care about whether they can get a free coffee.
The answer is always some version of "but they could trade their loyalty tokens on a marketplace." Could they? Would they? Is there evidence that customers want to trade loyalty points on a decentralised exchange? There is not.
What Might Actually Be Real
I want to be fair. There are use cases where blockchain technology has genuine potential.
Cross-border payments. Moving money internationally is slow, expensive, and involves multiple intermediaries. Blockchain-based payment rails could genuinely reduce cost and time. This is happening in practice, primarily in the crypto/fintech space, and it's one of the most credible enterprise use cases.
Digital identity. Self-sovereign identity - where individuals control their own identity credentials without depending on a central authority - is conceptually compelling. NZ's digital identity framework could potentially benefit from this approach. But the infrastructure isn't ready and the standards aren't mature.
Inter-organisational data sharing. When multiple organisations need to share data without trusting each other or wanting a central intermediary, a shared ledger has logical appeal. Healthcare records across providers. Credential verification across institutions. The trust problem is real. Whether blockchain is the best solution is still being determined.
$6.6B
global enterprise blockchain spending in 2022, up from $4.1B in 2021
Source: IDC Worldwide Blockchain Spending Guide, 2022
The Uncomfortable Questions
Before any enterprise Web3 investment, answer these honestly:
What problem are you solving? Not "what could blockchain do?" but "what specific, measurable problem does your organisation have that blockchain solves better than existing technology?"
Why not a database? For almost every enterprise blockchain pitch I've heard, a well-designed database with appropriate access controls solves the same problem faster, cheaper, and with better tooling. The burden of proof should be on the blockchain, not on the database.
Who runs the nodes? Decentralisation is the core value proposition of blockchain. If your blockchain is run by one organisation (a "private blockchain"), you've built a slow database with extra steps. The decentralisation has to be real for the technology to provide value over alternatives.
What happens when it's wrong? Immutability sounds good until data needs to be corrected. GDPR gives individuals the right to deletion. How does that work with an immutable ledger? Enterprise systems need the ability to fix mistakes. Blockchain makes that architecturally difficult.
Our Position
We're not anti-blockchain. We're anti-hype. The technology is genuinely interesting and may become important for specific enterprise use cases over the next decade. But right now, in 2022, for the NZ enterprise market:
- The infrastructure isn't mature enough for production enterprise workloads
- The developer talent pool is tiny
- The tooling is immature compared to traditional development
- Most pitched use cases don't require blockchain
- The regulatory landscape is uncertain
If a client wants to experiment, we'll help them understand the technology and evaluate whether their specific use case genuinely benefits from it. If it does, we'll build it. If it doesn't - and so far it usually doesn't - we'll say so.
Being honest about technology is more valuable than being enthusiastic about it.