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Blockchain—is it worth the hype?

The bulk of the Blockchain projects in the financial sector are still in pilot stage and not production ready.

March 29, 2019 / 08:26 PM IST
Representative image

Representative image

In recent years Blockchain technology has been hyped to be the next big thing that will revolutionise the banking and finance sector, by drastically reducing processing costs and bringing in the much-needed transparency to the system.

Though it is projected by Gartner that Blockchain will create USD 3.1 Trillion in business value by 2030. Still, the same research carried out by Gartner shows a completely different story about Blockchain and its realistic usage.

According to Adrian Leow, Sr Director Analyst, Gartner, “90 percent of Blockchain projects are centralized designs. They don’t need Blockchain technology to meet requirements as such. The project can be done more quickly, at lower cost, with lower risk and better quality — by avoiding Blockchain technology.”

Though the technology is rapidly evolving, the path for the technology's progress and adoption in various industries, including the BFSI sector, is unclear.

He also added that success stories around Blockchain is currently very limited. It is mainly because the core tenets of Blockchain technology, like Improbability, Scalability, Performance, True to Centralization, are missing to make it mainstream.

Close

We are definitely going to see a dip in Blockchain usage till around 2023, but from then on, the numbers are expected to go up rapidly. Leow emphasizes that larger focused investments and many successful models will start to emerge post 2022.

As far as financial sector is concerned where the Blockchain technology is going to have a major impact, Leow added many of the projects are still at pilot stage. “Our detailed research showed that there are plenty of PoCs and pilots being attempted in the finance and banking service industry. After digging deeper and speaking to various Blockchain consultancies and analysing around 398 separate Blockchain engagements, we found out that none of those 398 Blockchain engagements came out of the PoC stage. They are still in the R&D phase and still not production ready.”

In the long run Blockchain technology is definitely going to revolutionise the Banking financial sector. But right now the technology is still quite not ready. The CIOs and business leaders of various finance sectors needs to invest and understand the decentralized nature of Blockchain, Leow sums up.



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Moneycontrol News
first published: Mar 29, 2019 08:26 pm
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