There has been an overwhelming amount of hype surrounding Blockchain in recent years. Such is the hype that many big names in the market like Facebook, Microsoft, Barclays, UBS, etc. are putting in a lot of effort towards it. Even smaller companies are giving it all in experimenting with Blockchain and to find proper use cases for it in their respective industries. So, there should be no doubt when the figures according to Gartner states that the upcoming value of Blockchain is going to be around $3.1 trillion by 2030.
Though the interest in Blockchain continues to be high, but there is still a significant gap between the hype and market reality. Only 11% of CIOs indicated they have deployed or are in short-term planning with Blockchain, according to the Gartner 2019 CIO Agenda Survey of more than 3,000 CIOs. This may be because the majority of projects fail to get beyond the initial experimentation phase.
Coming to the BFSI sector where Blockchain is expected to have the most impact, Adrian Leow, Senior Director –Research Team Gartner, said that most of the Blockchain projects in the BFSI sector haven’t moved past the PoC stage. “While Blockchain technology has concrete use cases in other industries like manufacturing, BFSI is still lagging behind”, he adds.
He points out that this could be because some of the core tenets of Blockchain are currently missing to make it mainstream .
Blockchain currently has seen the most use cases in POCs in the banking & finance industries. Adrian Leow added, “After digging deeper and doing research on 398 separate Blockchain engagements the results that came out were none of them came past the POC stage and are constantly on their research labs without moving in on production.”
To be successful at conducting a Blockchain project, it is necessary to understand the root causes for failure. In a recent report, Gartner highlighted some of the common mistakes that organizations tend to make while embarking on a Blockchain project.
The most common mistake, says the agency, is the misuse of the technology itself and ignoring its key features such as decentralized consensus, tokenization or smart contracts.
The agency also highlights other common errors like, assuming that the technology is ready for production use and confusing it as complete application for their businesses.
Gartner experts emphasize that Blockchain should not be viewed purely as a database or storage mechanism, but rather as a technology designed to provide an authoritative, immutable, trusted record of events arising out of a dynamic collection of untrusted parties.
Lastly, the report adds that it is difficult to envision interoperability when most platforms and their underlying protocols are still being designed or developed and how smart contract technology will still undergo significant changes in Blockchain.
CIOs need to realize that Blockchain is not a solution, it is a revolutionary technology that can act as a foundation to build solutions. In the long run it will revolutionise every industry that is out there including the BFSI industry. Any CIO or application leader cannot ignore it, but they need to start understanding its decentralization nature to be able to derive value.
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