Has Blockchain Hit The Wall?
Martin Boyd, Contributor, Forbes
Jun 30, 2020
It was 4 o’clock in the morning and I had just spent another sleepless hour with a vital business challenge going round and round in my head. I had looked at the issue from multiple angles, considered best- and worst-case outcomes and worked through numerous solutions. A distraction was urgently needed. What else had been bothering me? The dog needed a new ball. I turned swiftly to Amazon AMZN . Like the business, the dog has very exacting requirements: the ball needed to bounce, squeak and be chew-proof.
Next day, a large truck turned up outside the front door. The delivery man wrestled a large box out of the trunk and left it outside. I steeled myself to lift the box only to find that, to my disappointment, it was light as a feather. Opening the not-insignificant packaging, I dug through mountains of extraneous padding and protection and there at the bottom, nestled in the corner, was the ball I ordered. Unfortunately, it was the wrong size.
Don’t judge a book…
Like many people, I found the early promise of blockchain to be very exciting. Secure and verifiable end-to-end transactions. Massively reduced time spent exchanging and confirming information. These promised to be as transformative to commerce as the internet and browsers. In one stroke, blockchain technology would break down barriers between industry participants and create an infrastructure virtually impervious to fraud.
The business I lead is focused on capital markets, and this market seemed ready for the type of step change that I imagined such a technology would bring. And the investment in blockchain globally has been significant. Worldwide spending on blockchain solutions is forecast to grow by over 60 percent between 2018-2023, reaching nearly $15.9 billion in 2023.
Some of this investment will undoubtedly result in new solutions, particularly where it solves performance problems. For example, various smart contract solutions, such as for trade finance or transaction processing, are based on blockchain. And blockchain continues to power the digital currencies where the technology first started life.
Yet at the same time, over 90% of blockchain projects fail, with an average lifespan of a little over a year.
What’s happened? Will blockchain quietly fade away, despite many organizations’ best efforts, just as numerous other innovations with promising futures have done before? I don't think that’s the case. But we need to understand the three reasons it hasn’t yet delivered on the scale envisaged …
No drama ...
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