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Gartner: Blockchain lacks functionality needed by enterprise

Gartner has found there is generally a lack of understanding of how blockchain can be used in the enterprise

Only 11% of CIOs have deployed or are in short-term planning with blockchain, according to analyst firm Gartner, which said the majority of projects fail to get beyond the initial experimentation phase.

“The blockchain platforms and technologies market is still nascent and there is no industry consensus on key components such as product concept, feature set and core application requirements,” said Adrian Leow, senior research director at Gartner. “We do not expect that there will be a single dominant platform in the next five years.”

Gartner found there is confusion among IT leaders over whether blockchain represented a business application. It is not a complete application and must also include features such as user interface, business logic, data persistence and interoperability mechanisms.

“When it comes to blockchain, there is the implicit assumption the foundation-level technology is not far removed from a complete application solution. This is not the case,” said Leow.

“It helps to view blockchain as a protocol to perform a certain task in a full application. No one would assume a protocol can be the sole base for a whole e-commerce system or social network.”

Gartner said another problem area for IT leaders is that in its current form, blockchain lacks the ability to delete records, which is needed for complete data management. “CIOs should assess the data management requirement of their blockchain project. A conventional data management solution might be the better option in some cases,” he said.

According to Gartner, CIOs do not fully understand the limitations of the technology. For instance, the analyst found many assume using blockchain for smart contract technology is a solved problem.

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While smart contracts are regarded as the most powerful aspect of blockchain-enabling technologies, Gartner warned there are scalability and management challenges in using them.

Smart contracts can be regarded conceptually, in a similar way to stored procedures that are associated with specific transaction records in a relational database.

However, unlike a stored procedure in a centralised database system, smart contracts are executed by all nodes in the peer-to-peer network. This, Gartner said, poses challenges in scalability and manageability that have yet to be fully addressed.

Smart contract technology will still undergo significant changes. CIOs should not plan for full adoption yet, but run small experiments first. The analyst expects this area of blockchain to continue to mature over the next two or three years.

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