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A massive 90% of all blockchain platforms in businesses will have to be replaced before 2021, according to Gartner.
The analyst company said blockchain platforms will have to be replaced to ensure they are competitive, secure and don’t become obsolete.
Adrian Lee, senior research director at Gartner, said many CIOs created “unrealistic expectations” when assessing offerings from blockchain platform providers and service providers because they overestimated the capabilities and short-term benefits.
“Blockchain platforms are emerging platforms and, at this point, nearly indistinguishable in some cases from core blockchain technology,” added Lee.
Ethereum, Hyperledger Fabric, IBM Blockchain, Multichain, Ripple, and R3 Corda are some of the blockchain platforms available commercially today. Lee said IT buyers in enterprises are being confused by the fragmented blockchain platform offerings which often overlap or are being used in a complementary fashion.
“Compounding this challenge is the fact that blockchain platform vendors typically use messaging that does not link to a target buyer’s use cases and business benefits. For example, ‘transactions’ was the term mentioned the most in relation to blockchain, followed by ‘secure’ and ‘security’,” he said.
“While these may be functions of blockchain-enabling technology, buyers are still confused as to how these functions are achieved or what benefits blockchain adds compared to their existing processes.”
Interest in blockchain will continue to increase and the fragmented market is likely to continue for at least another five years, due to a lack of consensus and standards, before a single dominant blockchain platform might begin to emerge.
Garter predicts that by 2025, the business value added by blockchain will be more than $176bn, but this will then surge to exceed $3.1tn by 2030, when more consensus and platform domination emerges.
“Product managers should prepare for rapid evolution, early obsolescence, a shifting competitive landscape, future consolidation of offerings and the potential failure of early-stage technologies/functionality in the blockchain platform market,” said Lee.
Organisations are testing out the application of blockchain in real-life business processes, with the financial services sector, unsurprisingly, heading the pack.
For example, JP Morgan has used blockchain technology to build a cross-border payments network, to which 75 other banks have signed up to test out. Using a distributed ledger that can be accessed by the banks involved, JP Morgan aims to make it easier to carry out compliance checks and make corrections.
Then there is an HSBC and ING trial of blockchain’s application to trade financing, which the companies claim has been a success, leading the way to faster, cheaper and more secure transactions.
Trade finance transactions are large, often international, payments that traditionally require many participants, lots of paper and many couriers. The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous.
According to the Blockchain Council, which is made up of a group of blockchain experts, the technology that began as the underlying platform for bitcoin exchange has now evolved into a mainstream technology.
“It finds application in various fields. Whether it is healthcare or finance, you can find many companies venturing into blockchain technology and developing blockchain based applications that will help in making the business operations more transparent and efficient,” said the council.
Read more about blockchain and its application
- In this e-guide, read about how blockchain’s inherent security makes it tamper-proof and perfect for keeping and sharing records for transactions in many scenarios.
- Dubai government is introducing a biometric border checking system that uses blockchain to ensure sensitive data can only be seen by the digital passport holder and the relevant authorities.
- Artificial intelligence and blockchain initiatives are earmarked for a doubling of investment, finds the 2018 Computer Weekly/TechTarget IT Priorities survey.
- By reducing the cost of peer-to-peer data and resource transfer, blockchain can remove the need for third parties and middlemen across industries.