Is The Hype around Blockchain Over?
Just recently, I have noticed more ‘negative’ stories about blockchain appearing. The latest were around a report by BCG claiming the gloss around Blockchain was wearing off. Good. It’s about time! Those of us that have been around a bit have seen this sort of hype before and have learned to recognize the signs…… Read .Com. Now we are getting past the overhyped claims, the idea that blockchain is the solution for every issue, we might see some real progress in deploying the technology. As Patrick has pointed out in a couple of past articles, it got to the point that by adding ‘blockchain’ or similar to an existing company name, the share price would forth over – even if the link was tenuous at best between said company activities and blockchain.
Th BCG report was actually quite pragmatic by all accounts arguing that blockchain technology is simply not suited for commodities trading – at least for now.
“Commodity trading needs improved standardization, efficiency, and tracking of goods. But whether blockchain is the killer app that will deliver these benefits remains to be seen. Industry players have yet to fully adopt the technology. There are marked benefits to blockchain technology but also significant drawbacks on several fronts.”
“For a blockchain-based solution to gain acceptance, most trades would have to be recorded accurately in a shared ledger. If transactions were recorded in such a ledger, participants could compare the price of their consignment against other consignments and thereby spot discrepancies. Greater transparency would lead to fairer prices. However, it would impact the profits of traders that rely on pricing inefficiencies to make money. Price-reporting agencies would also need to find new ways to expand their businesses.”
In fact, the BCG report echoes the findings of our own disruptive technologies research and report released recently (kindly sponsored by FIS). Our research suggested that despite the visibility and interest in blockchain, the more immediate area of investment within commodity firms was likely to be in data mining, Machine Learning (ML) and Artificial Intelligence (AI), at least in the short-term. While many firms are investing in the cloud, they also see significant business value in their data and are seeking ways to unlock that value. Despite that, the majority of those surveyed agree that blockchain may be the most disruptive technology in the future and that E/CTRM vendors are likely to be the most disrupted by it.
Meanwhile an article by Fitch also comes to similar conclusions stating that “overall, blockchain remains a rather immature technology and it is generally considered that it is still three to five years away from feasibility at scale. Moreover, the strategic case for agribusiness players to invest in the technology in order to profit from it has not been proven yet.”
A recent TED talk by Don Tapsacott summed it up pretty well — “the technology genie has escaped from the bottle, and it was summoned by an unknown person or persons at this uncertain time in human history, and it’s giving us another kick at the can, another opportunity to rewrite the economic power grid and the old order of things, and solve some of the world’s most difficult problems, if we will it”.
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