Many of the early blockchain projects will either be quietly shelved in favour of more traditional approaches or they will evolve in a way which reduces their dependence on the technology.
While the market is awash with absurd claims about the benefits of blockchain, there are some key domains where the ability to execute distributed transactions without relying on a single central authority will bring significant value. While the technology will have lost much of its gloss by 2025, it will have found its way into the heart of many key business processes, especially those involving multiple, disparate, participants.
In a world where computer code is trusted more than human-run operations – especially amongst tech-savvy, urban Millennials, distributed ledger technology will come to be seen as a powerful antidote to the high fees charged by intermediaries such as banks, law firms and other ‘middlemen’ because it enables individuals, corporations and devices to transact with each other independently.
Gary Barnett, Chief Analyst, Technology Thematic Research at GlobalData, comments: ‘‘We are entering a new phase in the evolution of blockchain technology; over the next 24 months the more outlandish claims made by proponents of blockchain will be debunked and technology providers and users alike will begin looking with clearer eyes at the narrow but significant set of use-cases where blockchain and distributed ledger technology can add real value.’’
The space is being shaped by a host of startups, platform providers and consortia on the supply side working with the likes of Goldman Sachs, Santander and Credit China FinTech in the financial services sector and IBM, Microsoft, Intel and Telstra in the technology sector. The British, Swedish and Singapore governments have also embraced it. The three main use case categories are asset registries, financial services platforms and industrial platforms.
Barnett adds: “Despite the hype, blockchain technology is not free, nor does it have the supernatural ability to transform your processes. Claims that blockchain technology will cut costs in financial services or logistics by 30% are fanciful to the point of being dishonest, since the bulk of these savings will come from the digitisation and modernisation of processes rather than blockchain or DLT.’’