Blockchain Slowdown Coming Down The Block?
All things white hot … cool down. To put it another way, might the additions of links to the blockchain be slowed a bit?
Forrester Research noted that some projects may be winding down, and some pilot tests of the technology may be walked back a bit, illuminating at least some isolated cases of tempered enthusiasm or expectations of blockchain potential. As reported in Bloomberg, and as calculated by Forrester, the chance of failure is considerable, as 90 percent of the time blockchain “experiments” never go live.
Against that stark backdrop, the evidence plays out in terms of some individual initiatives. Consider the case where Nasdaq, which has been public about its enthusiasm for blockchain projects for the last two years, has not put the enthusiasm into practice on any wide scale. (We note a bit of skepticism that surfaced in this space earlier this year, when Karen Webster stated that reality and hype may be two different things.)
As the financial publication reported, “the expectation was we’d quickly find use cases,” explained Magnus Haglind, Nasdaq’s senior vice president and head of Product Management for Market Technology. “But introducing new technologies requires broad collaboration with industry participants, and it all takes time.”
In another example ASX, an Australian a stock exchange, has pushed back its plans for a blockchain clearing and settlement service to 2021, as compared to a rollout that, two years ago, was expected to be done in 18 months.
Though the headlines may be mushrooming when it comes to excitement over distributed ledger technology (DLT), only a sliver of CIOs see blockchain as part of their corporate futures — razor thin, to the tune of 1 percent. That comes courtesy of a Gartner study. Perhaps then, do not look for a pickup, as 80 percent of CIOs said they were not interested in blockchain.
Also in Australia, and as cited by Bloomberg, the Australian mining firm BHP Billiton said there is no blockchain initiative in development, despite projects talked about two years ago that would have debuted in 2017 (where such tech would have been used to track rock and fluid samples).
Some demand may be tempered by the lack of standardization between software offerings and volume limitations.
The read-across could be a tough one for companies like Microsoft and IBM, which are in the midst of spending time and money on blockchain-related hardware and software. Estimates from Wintergreen Research show that the duo has about half of the market share of blockchain-related tech, valued at as much as $700 million.
But New Announcements, Too…
This is not to say, of course, that blockchain’s links are broken. In the last several days, PayStand, a blockchain B2B firm, announced that it is a participant in an accelerator program, backed by Silicon Valley Bank and First Data, known as Commerce.Innovated. The goal is to develop a B2B payments network underpinned by blockchain. As part of that initiative, the network will look toward improving the payments process, from accounts receivable to invoicing activities.
Separately, in evidence of use-case events, the Agricultural Bank of China (ABC) said it has issued a loan across blockchain worth about $300,000. The loan made its way across a blockchain continuum that was, in turn, comprised in part by other banks and government agencies. ABC said such technology can eliminate the issue of double spending … which means that borrowers would be unable to use the same piece of land for multiple loans.