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Digital Economy:
What will the global market get

Blockchain based hangover

02 August 2018 13:47, UTC   |   2113
Blockchain based hangover
By Daniil Danchenko

There are two types of projects in the world of the blockchain. In the first one there are highly logical ones, which were digitally forged to solve a task at hand: streamlining taxation, logistics, contracts registrations - and all that jazz. There are other ones - that were created because a couple of guys had a neat idea and it was too good to miss out. So they made it real, even if they had no real reason to do so. Such projects have not real problem to solve or “endgame,” and they have a different fate.

The Agricultural Bank of China (ABC), the world’s third largest bank, issued a farmland loan worth $300,000 through the blockchain. That was the first time when the bank did something like this through the blockchain, and they are feeling like doing this again - throughout the whole China, big business is doing the switch in favor of blockchain. Ford, Disney, Siemens, Intel, Nestle and many other companies are either building the blockchain or already have finalized solutions.

Everyone who is following this topic can see that blockchain world is like two worlds. First one is about conferences, BitCONs and BlockCON’s and various exclamations station geniuses of the “Innovative product X.” Moreover, the second one is far more brutal - with cold-eyed fintech specialists that never say an extra word. However, both these worlds are unified by the fact that time is running out for both of them.

Optimists state that they have time till 2019, but realists are stating that this very year is the year of reckoning for the blockchain. And without a revolution in the sphere stagnation is imminent.

So what is the reason of the blockchain hangover, that is slowly creeping in, after the blockchain euphoria? According to the Gartner, the reality of the industry is far from the rainbow and sunshine that crypto media draws. There is a lack of qualified staff, education in the field is lacking, and employees are wary.

41% of managers noted in the survey complained about the lack of knowledge and general staff shortage. This leads to the ironic situation, when despite its popularity the technology itself is not that attractive to the people. 34% of CIT’s are just not interested in implementing the technology since it will take way too much time and effort. Another 43% are interested, but they’ll rather wait and see for the results than spend resources on the required reformation. Due to the nature of the industry and related risks and unorthodox ideas, that are prevalent in it scare off small to medium-sized companies. As a result - blockchain stays nothing but the bigwig's sandbox.

“The wait and see” positions put the whole set of the DLT projects in jeopardy, and as result people start to think “Nah, this is too hard” or “Nah, this won’t work,” Nasdaq serves here as a good example. This company is one of the pioneers in the crypto and industry. Their big project, deployment of the blockchain for voting in shareholder meetings and private-company stock issuance got stuck, and there is not much use of the stated technology in any widely deployed projects yet.

And such projects are not exceptions - for example, Australian mining giant BHP Billiton stated in 2016 that they would deploy blockchain to track rock and fluid samples in early 2017. However, right now corporation does not have any plans for the blockchain oriented projects.

Michael Novogratz, the legend of the crypto industry and, among other things, the owner of Galaxy Digital, predicted that the blockchain revolution and universal tokenization would come in 5-6 years. Given its current pace, it is safe to multiply this period by two. Because even in 6 years it is unlikely that blockchain mass adoption will happen.

Blockchain revolution has failed, and evolution will take more time.

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