Blockchain is often upheld as a disruptive revolution that will dramatically change the way we conduct transactions on the internet. Its rise has generated somewhat of a ‘buzz’ throughout the technological landscape and many claim it will transform the financial industry and potentially the world.
However, despite the hype, there hasn’t been much in terms of genuine risk-taking. Blockchain’s popularity could be described as Abraham Maslow’s hammer; ‘if it’s the only tool you have, you have to treat everything as if it were a nail’. In this case, while blockchain is a new and unexplored territory, it’s wise to resist the urge to delve in head first. Instead, decision makers should carefully evaluate the potential capabilities of blockchain and decide if it’s the right ‘tool’ for the job.
With everyone eager to be pioneer of blockchain, rollout pilots have been rushed and have developed from fear to necessity. While innovation shouldn’t be hindered, those who are eager to implement such technology should give themselves a much-needed reality check.
There is no denying that blockchain has enormous, transformative potential. With companies such as Belgium’s Port of Antwerp piloting Blockchain technology alongside T-Mining to create more efficient and secure container handling, the new technology offers beneficial opportunities.
The reality of blockchain
While we acknowledge the evident benefits of blockchain technology, businesses should keep in mind that this new solution is not a ‘one fits all’ magic solution.
2018 will be a crucial year when determining blockchain’s future, development and longevity. Currently blockchain is the ‘hot topic’ of the moment and spending is high, with IDC calming there will be $2.1 billion spent globally on blockchain during the year.
With 6 out of 10 large corporations considering employing blockchain technology, according to a Juniper Research survey, businesses clearly seek to pioneer and adopt this technology. However, with many Blockchain journeys in their infancies, discussion about their benefits are hypothetical and therefore hard to measure. Furthermore, with many companies creating their own specific blockchains, Tim Swanson of R3CEV identified how this defeats the purpose of Blockchain’s aim of a decentralised network.
Despite this, demand for blockchain is high, according to SAP survey of 200 senior business leaders, supply chain managers, innovation/strategy officers and business analysts. According to the survey 92% view blockchain as a big opportunity and 96% believe blockchain will improve compliance of companies. However, with only 3% currently using blockchain, the technology is trusted but treated with a great deal of caution.
No-one can deny the possibilities of blockchain. But with possibilities come limitations. Blockchain technologies are considerably limited by lack of understanding towards the new technology, particularly outside the banking industry.
Another limitation is lack of current scalability. The longer a specific blockchain is in use, the longer its chain gets. This leads to an increased need for storage infrastructure across its full network nodes that store a copy of the chain.
Another downside can be the cultural implications of this new technology. Estimations from William Mougayar suggest blockchain is about 80% business process change and 20% technology implementation. While most blockchain codes are open source and run on low-cost hardware and public clouds, the full integration of blockchains into existing environments requires both extensive resources and expertise.
Blockchain technologies, like the systems and tools users need to interact with them, require IT maintenance and support. Therefore, seeking the support of a third party is recommended to alleviate some of the stresses and strains associated with adopting new technology.
There is no denying that blockchain is a game-changer for many industries, but it is easy to get caught up in the excitement of new technology.
Loan Pham, NashTech Technical Director gives her thoughts on the ‘hype’ surrounding blockchain, “Despite having attracted an enormous amount of attention during its past “hype” phase, practical applications of blockchain are still rather limited…there still are concerns about the existing Blockchain-based platforms…such as those security issues that have been talked about lately.”
She goes on to encourage businesses to devote efforts to the development of blockchain, “Regardless, the Blockchain technology is undeniably the foundation for upcoming radical changes in different areas, from economy to society, thanks to its built-in quality of integrity, legitimacy and transparency. It is just a matter of time for the Blockchain-based platforms and implementations to get solidified, and for Blockchain’s nature of breakthrough becomes more comprehensible to, and eventually embraced by the majority. I believe that Blockchain-based applications will soon go full bloom in a year or two.”