As 2019 becomes the testing time for Blockchain technology, it seems to have disappointed enterprises after the hype that was created
Portrayed as the revolutionizing technology in 2016-17, Blockchain is currently not being able to deliver on the high expectations that it had promised. According to Deloitte’s 2018 survey of more than 1,000 Blockchain-savvy executives globally, 39% said they believe Blockchain is “overhyped.”
Though there are many companies that are offering Blockchain based digital solutions for the banking, financial services, and insurance verticals and more, the applications have so far fallen short of the results they had promised to deliver.
Falling short of the expectations
Compared to the expectations from the technology from 2016, Blockchain adoption and its move into production should have happened at a faster pace than what was seen far in 2018. But it appears Blockchain is still three to five years away from feasibility at scale.
The PWC Global Blockchain Survey 2018 saw participation from over 1000 companies. From the enterprises that have pilot Blockchain projects, 54% believe that the effort is not seeing justified results.
Some respondents have shown little or no involvement for a number of reasons.
31% feel the costs involved in adopting it are not justified.
24% are facing uncertainty about where to start.
14% are facing governance issues and 10% are not seeing any actual benefits.
Only 1% of CIOs from over 1000 companies responding to the Gartner 2018 CIO Survey, indicated interest in any kind of Blockchain adoption. Of these only 8% are planning it for short-term and pilot execution. More than 75% of responding CIOs said that they did not have an interest in the technology, or any plans to implement it.
But, there is hope
Even though the trust in the potential of the technology is decreasing, there is still hope for some. Though it is rolling out at moderate speed compared to the hyped expectations, its adoption remains promising. The technology is still a priority investment for many companies. The Deloitte report also suggests that 2019 will see 39% of organizations invest $5 million or more in Blockchain technology.
For a better future
The way to go ahead in Blockchain technology includes the below suggestions from PWC and EU scalability report 2019:
- The companies have to identify value by assessing the impact and feasibility at every level and focus on addressing the issues with specific use cases. They also have to understand the concept of governance of decentralized technologies and their applications.
- The policymakers and the Blockchain industry should prioritize the development of standards. Especially, draw standards for digital identities in a Blockchain context and for interoperability between the elements.
- Governments need to work on clarifying many legal and regulatory issues thrown up by Blockchain. ‘These include resolving the tensions between GDPR and Blockchain, the legal, fiscal and accounting status of crypto assets, and the legal status of smart contracts, among others,’ says the EU report.
While the potential use cases for Blockchain are vast and considered highly disruptive in most industries, it is not the solution for every problem. However, it can lower risks of errors and fraud and improve agility in many processes. Perhaps that will be the single biggest factor for faster adoption in the next few years.