Blockchain has been touted as a potential game-changer However, there are emerging doubts. A particular concern, given the amount of money and time spent, is that little of substance has been achieved, according to consulting firm McKinsey & Company.
“Of the many use cases, a large number are still at the idea stage, while others are in development but with no output. The bottomline is that despite billions of dollars of investment, and nearly as many headlines, evidence for a practical scalable use for blockchain is thin on the ground,” it says in a blog post.
It adds: “Across its many applications, blockchain arguably remains stuck at stage 1 in the lifecycle (with a few exceptions). The vast majority of proofs of concept (POCs) are in pioneering mode (or being wound up) and many projects have failed to get to Series C funding rounds.”
One reason for the lack of progress is the emergence of competing technologies. In payments, for example, it makes sense that a shared ledger could replace the current highly intermediated system. However, blockchains are not the only game in town, and numerous FinTechs are disrupting the value chain.
“Companies set on taking blockchain forward must adapt their strategic playbooks, honestly review the advantages over more conventional solutions, and embrace a more hard-headed commercial approach. They should be quick to abandon applications where there is no incremental value. In many industries, the necessary collaboration may best be undertaken with reference to the ecosystems starting to reshape digital commerce. If they can do all that, and be patient, blockchain may still emerge as Occam’s right answer,” the blog post concludes.