Blockchain technology in 2018 and 2019: Looking back and moving forward Bookmark has been added
Blockchain technology in 2018 and 2019: Looking back and moving forward
More realism, more transparency, more investments
From a risk perspective 2018 was an interesting year. But what will 2019 bring? In this blog series we look back, but moreover: we move forward. How can developments around blockchain technology, cyber risk, risk sensing and privacy help you gain a competitive advantage in the years to come? The last episode is about blockchain technology: where we see more realism, more transparency and more investments than in the years before.
By Tommie van der Bosch
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- The bigger blockchain technology picture
- More blockchain technology investments
- Looking forward
- More information
2018 was the year that great blockchain promises were tempered with realism. In the past few years, many promises have been made about blockchain technology and how it would change the world, but real disruptions were noticeably lacking. Therefore, in 2018 - after the cryptocurrency crash in January and the further decline in the past few weeks - people started to wonder: isn’t blockchain just a technology looking for a solution? Is the value of blockchain more potential than actual?
To start with the second question: no, blockchain is not more potential than actual. I’d like to compare the development of blockchain technology to the evolution of the internet, which was invented in the 1960s yet and only started to change the world in the late 1990s. Blockchain is still highly conceptual, its application is harder to understand than for example 3D printing or Internet of Things applications, which means that commercial uses remain limited. In the long term, however, blockchain still has the potential to reshape industries and create new business models, products and services.
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The bigger blockchain technology picture
It’s actually a good thing that some realism got into the debate about blockchain technology. As a result, organisations started to think about the impact of blockchain technology from a C-level perspective. Many clients asked us to give them strategic and operational advice on blockchain technology. They are looking at the long-term bigger picture, instead of hoping to score some publicity points with a quick proof of concept.
Only with a broader vision on how the technology might affect them in the long term, can organisations consider developing blockchain applications. Organisations need to dive into the feasibility, the viability and the desirability of what they want to develop, before starting to develop it.
We did this analysis for example for a financial institution, looking to apply tokenisation related to (some of) its assets. Before the bank started building a proof of concept, it wanted to know whether there were any regulatory or technical restrictions, whether institutional investors would truly be interested in such tokens, and whether there is a business model behind the concept.
More blockchain technology investments
2018 was also - again - the year of further increasing investments in blockchain technology. Deloitte’s most recent survey shows that executives of large corporations worldwide consider blockchain as a strategic priority and that over 65% of them is planning to invest more than 1 million dollars over the next year.
Until recently most organisations kept to themselves what they were doing with blockchain technology. In 2018, we started to see more transparency in blockchain projects. A supermarket launched an app which enables consumers to trace the origins of their orange juice. Ticketing platform GUTS now uses blockchain technology to create a transparent ticketing ecosystem, thereby eliminating shadowy secondary market prices and ticket fraud. Although not all such solution might be working optimally, it is a step forward that those companies stepped out of the experimental environment and actually started putting blockchain in practice.
According to Gartner, in 2018 the number of active blockchain consortia across industries has rapidly increased from 28 to more than 60. A partnership with a competing organisation can be quite challenging for several reasons. However this is where the actual value of blockchain is to be found. Setting up the right network—and thus the ecosystem—is essential when considering the transition from experimentation into commercialisation. An experimental blockchain can be simulated without such an ecosystem and a commercialised solution cannot be sustained without it. That is also why fifteen multinationals, including three competing Dutch banks, are building a blockchain-based trading platform called komgo, which they announced in September 2018.
More realism, more investments and more transparency are all developments that will continue in 2019. Of course, there are still barriers to the adoption of blockchain technology: blockchain-based transaction systems are still comparatively slow, and there is currently a lack of interoperability between various blockchain networks. In addition, organisations continue to have legal and regulatory concerns. However, the good news is that progress is being made in addressing all these obstacles, as our American colleagues point out in this article. That should make 2019, again, a very interesting blockchain year.
For more information about blockchain technology, please contact Tommie van der Bosch via the contact details below.