Nouriel Roubini Lines Up with Criticism of Blockchain Technology
Gratuitous additions of blockchain solutions do little for business, a Bloomberg analysis reveals.
Nouriel Roubini, an economist known for being critical of bubbles and market exuberance, has pointed out that “Most companies will halt their blockchain tests” in a recent tweet, pointing out a Bloomberg publication and lining up with other recent critics of the technology:
Most companies will halt their blockchain tests. "The disconnect between the hype and the reality is significant — I’ve never seen anything like it,” said Rajesh Kandaswamy, an analyst at Gartner Inc. “In terms of actual production use, it’s very rare.” https://t.co/6EUDptajV6
— Nouriel Roubini (@Nouriel) August 1, 2018
A day earlier, the Nobel Prize winner economist Paul Krugman pointed out the uselessness of Bitcoin, based on his understanding of how money should work.
According to a research by Forrester Research, Inc., quoted by Bloomberg, traditional businesses are either scaling back the testing, or outright abandoning their efforts to include blockchain solutions into their day-to-day affairs.
At the same time, crypto-based projects are still working on potential solutions for the business, though involving public blockchains, or options to build private chains. Most ICO projects have managed to deliver a digital asset and bring at least some users to distributed apps.
However, those projects were based on the idea of a distributed community served by decentralized systems. Traditional businesses, on the other hand, may find a distributed solution is nothing more than a useless gimmick. At one point, blockchain was also merely a buzzword used by pink sheet companies to pump their stocks.
IBM remains one of the largest supporters of the blockchain space,
recently working with Stellar (XLM). The company is spending additionally to promote blockchain solutions and side services. Microsoft is also exploring the matter, and its cloud services are often used by blockchain projects. However, analysts believe the hype may hurt those companies.
“Blockchain is supposed to be an important future revenue stream for IBM, Microsoft and others in equipment sales, cloud services and consulting,” said Roger Kay, president of Endpoint Technologies Associates. “If it materializes more slowly, analysts will have to make downward revisions.”
However, IBM continues to invest and hopes to find clients for its blockchain solutions, employing 1,500 experts so far. Microsoft also remains upbeat:
“We see tremendous momentum and progress in the enterprise blockchain marketplace,” said the company in a statement. “We remain committed to developing cutting-edge technology and working side-by-side with industry leaders to ensure business of all types realize this value.”
Curiously, Forrester Research has also released reports with positive assessment of blockchain projects and their chances of disrupting current practices.
Yet, blockchain solutions, whether offered by large-scale corporations or startups, are facing still-unsolved issues, including a lack of common standards, as well as scalability issues.