If you’re starting to feel the effects of cabin fever from
all the bluff and bluster around blockchain hype today, Gartner argues that by
2023 it will be a case of man overboard.
According to the analyst firm’s latest note, up to 90% of
initiatives featuring the application of blockchain technologies in the supply
chain will suffer ‘blockchain fatigue’ by 2023 due to a lack of strong use
This can essentially be boiled down as a microcosm of Gartner’s long-held hype cycle theorem. According to the company’s most recent chart (below), 2023 appears to be right in the middle of the trough of disillusionment for blockchain. While the company advocates that within five years the majority of blockchain’s core technical challenges are likely to be resolved, this may not translate smoothly into becoming a core part of business.
The landscape today has more than a passing similarity to
the cloud landscape of several years ago. Stakeholders were dipping their toes
in, conversations converged around public, private or hybrid as the best
strategy, before consensus emerged and, through multi-cloud, becoming a core
part of the economy.
For blockchain, determining a path to value remains a key
roadblock. At MWC Barcelona in February, Brett May, VP and COO of Internet of
Things (IoT) research at McKinsey, posited that more than half of companies polled
(58%) who had gone into production with their IoT initiatives had seen at
least a 5% increase in revenue.
The question, therefore, is simple: what needs to happen to
cross the chasm? “Supply chain blockchain projects have mostly focused on
verifying authenticity, improving traceability and visibility, and improving
transactional trust,” said Alex Pradhan, senior principal research analyst at
Gartner in a statement. “However, most have remained pilot projects due to a
combination of technology immaturity, lack of standards, overly ambitious scope
and a misunderstanding of how blockchain could, or should, actually help the supply
“Inevitably, this is causing the market to experience
blockchain fatigue,” Pradhan added.
Douglas Horn, architect at Telos Blockchain, similarly sees
it from a technical perspective. This may not be surprising, given Horn
authored the company’s whitepaper and is a key part of Telos’ vision as an enabler
of cutting-edge EOSIO software – but there is also a cultural element at play.
“We have to look at the fact that a lot of these proof of
concepts for the last year have never elevated to a useful piece,” Horn told The Block. “I think that’s very much
tied to the fact that when people look at this, and they really do the maths,
they’re realising that there was, on the current platforms available at the
time, simply no real way to scale.
“Until the network’s there, built and active, that it can be
rolled out on, nobody’s going to roll out, because they’re dooming themselves
to failure,” Horn added. “I think these [enterprise decision makers] are very
smart, and they realise they probably have one chance to graduate from POC to working
solution – and they don’t want to mess up their chance by doing it on a
platform like Ethereum where it will never scale.”
Gartner added that organisations should remain ‘cautious’ about blockchain adoption and ‘not to rush into making blockchain work in their supply chain until there is a clear distinction between hype and core capability.’
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Credit: Blockchain News