Given that blockchain technology first emerged ten years ago, Gartner’s recent finding that the business impact of blockchain will be transformational in five to ten years is surprising. Blockchain, especially over the past 12 months, has become a business buzzword and everyone is looking for the best way to apply it.
However, according to the 2019 Gartner Hype Cycle for Blockchain it will be five to ten years before the technology becomes transformational in most industries.
The Hype Cycle provides an overview of how blockchain capabilities are evolving from a business perspective and maturity across different industries. Based on the findings of the Gartner 2019 CIO Agenda Survey (registration required), the hype cycle shows three industries that Gartner believes will move to adoption.
1. Banking and Investment Services
Nearly 18 percent of banking and investment services CIOs said they have adopted or will adopt some form of blockchain technology within the next 12 months and nearly another 15 percent within two years.
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In the fast-growing e-sport industry, blockchain natives are launching solutions that allow users to create their own tokens to support the design of competition as well as to enable trading of virtual goods.
Blockchain is being considered for “track and trace” services, counterfeit prevention, inventory management and auditing, any of which could be used to improve product quality or food safety, for example.
Five Year Enterprise Roll-Out
Jimmy Nguyen, the president of the Bitcoin Association, told CMSWire that the five-to-ten year assessment is an accurate one though he believes that some practical blockchain technologies could take-off in the next two-to-three years.
Bitcoin and blockchain technology should be much farther along now, he told CMSWire. However, bitcoin and the entire industry were artificially crippled for too many years because Bitcoin would not raise its tiny 1MB block cap. That prevented bitcoin from growing earlier to support global adoption for payment transactions and for enterprise blockchain applications.
The artificial 1MB limit on Bitcoin also led other competing blockchain projects to emerge, and helped create today’s world where we may have far too many competing blockchain, distributed ledger and cryptocurrency projects.
He pointed out that Bitcoin always had the capacity to be the one global data ledger and to power all the other advanced functions people want from blockchain — smart contracts, tokens, decentralized apps, and much more. Had BTC scaled to bigger blocks much earlier on its life, blockchain technology would be much farther along than it is now.
The result is that enterprises are still struggling to find a blockchain that fits their needs, especially from a scaling perspective. Ethereum’s struggles to scale demonstrate that, with Vitalik Buterin, the creator of Ethereum
recently acknowledging that the Ethereum blockchain is almost full and a fact that is inhibiting on-boarded of new businesses onto its network.
The entire blockchain industry has years of catching up to do, he added. CIOs of big businesses need a blockchain that has significant data and transaction capacity, and provides a stable protocol so they can reliably build their projects on it.
These are the reasons why Bitcoin SV (BSV) emerged. BSV is now powering a massively scaled blockchain — with 2000 MB block cap now and an unlimited block cap next February 2020 — to provide data capacity to be the public blockchain needed to support enterprise applications.
“On BSV, we are already seeing an explosion of exciting new applications being built, so expect to see enterprise use of the BSV blockchain in the next few years,” he said.
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Blockchain growth has moved way past the era of hype and bitcoin bubble. So far, 2019 has allowed for projects to focus on blockchain development with many creative and innovative techs springing up in the blockchain ecosystem, Awosika Israel Ayodeji, enterprise solutions lead at Caymans-based Hydro Labs said.
Enterprise blockchain is gradually gaining attention with the likes of IBM, Consensys and Hydro Labs offering blockchain solutions to companies globally. Considering that many still see blockchain as new tech and so many are still learning to separate blockchain from cryptocurrency, it could take a while for blockchain to be fully adopted in the enterprise circle. “Companies do not want to be the first to explore the new tech and those already exploring are still in testing phase to ensure that the tech sync well with their systems and operations,” he said.
He pointed to a forecast by Deep Analysis that put enterprise blockchain full adoption at 2024, making the five year timeline for blockchain mainstream adoption by Gartner valid
Still More Problems
Dr. Michael Yuan, founder of a new decentralized marketplace OpenBay and CEO of Second State told us that these are not the only problems for enterprise blockchain projects. There are three principle issues:
1. Incorporating Blockchain
Incorporating blockchain technology into businesses and industries is a significant investment, requiring substantial time, money and effort. In addition to the still significant amount of institutional resistance, he said, “there are operational and technical challenges that have inhibited mainstream adoption of blockchain technology
2. Standardized Middleware
For developers to create usable distributed applications, there needs to be a viable blockchain protocol to support “smart business contracts.” Such a protocol must include not only a virtual machine, but also a middleware software stack outside of the blockchain. (Today this is handled by so-called “DApps in a non-standard way.) While running the blockchain ledger, every node in the blockchain can support standardized middleware.
3. Reusable Software
As with successful enterprise software, the key is not to create an all-powerful virtual machine or programming language, but to build an extensive library of reusable software components — and then standardize the whole stack. Take the Linux operating system, for example. It was widely adopted by enterprise users only after the community had extended the core operating system with thousands of business-friendly software packages (and after Fedora/Red Hat came along to standardize the stack). The strengths of enterprise platforms lie in their standardized libraries and frameworks.
Cosmos, the network that was designed to improve blockchain interoperability, released its live software earlier this year. “Is that the breakthrough? It’s too soon to say, but crucial in a high-performance environment, where computing power and network latency are typically not a concern, is the design for reliability and interoperability in enterprise applications. It’s why blockchain already is moving from just another IT function to a true ecosystem builder — not if, but when,” he said.
First Published at Blockchain Is on the Way, But Adoption Is Slow – CMSWire