The promises of blockchain technology are vast, but the results to date have not met expectations. So where is blockchain heading, and when will we be there?
Investment Bank HSBC Holdings announced plans this week to move $20 billion in assets to blockchain technology.
According to Computerworld: “The London-based company, the seventh largest bank in the world, plans to move $20 billion in assets that include equity, debt and real estate onto its new Digital Vault blockchain, a shift away from its current use of paper records to respond to client search requests. …
By getting investors to interact with this data on the blockchain through decentralized applications (dApps) supported by friendly user interfaces, HSBC is helping build the on-ramps and infrastructure needed to take blockchain DLT mainstream, according to Avivah Litan, a Gartner vice president of research.”
Some experts see this HSBC development as a potential game-changer. However, others are not so sure. They point to the fact that State Street Bank just cut over 100 blockchain development positions.
Indeed, a report by McKinsey & Company from earlier this year proclaimed blockchain’s amazing potential to be a game-changer.
“One sign of blockchain’s perceived potential is the large investments being made. Venture-capital funding for blockchain startups reached $1 billion in 2017. IBM has invested more than $200 million in a blockchain-powered data-sharing solution for the Internet of Things, and Google has reportedly been working with blockchains since 2016. The financial industry spends around $1.7 billion annually on experimentation.”
Nevertheless, “despite billions of dollars of investment, and nearly as many headlines, evidence for a practical scalable use for blockchain is thin on the ground.”
This article from The Motley Fool describes the many benefits of blockchain technology and the companies who have blockchain patents. At the top of the list in 2018 was Bank of America.
Other Potential Industry Uses for Blockchain?
Beyond banking and finance, there has been plenty of talk about blockchain voting ever since the election challenges in 2016. Here are some very recent examples:
Another potential use of blockchain technology is for protecting privacy and transparency in genetic testing. This article describes how Nebula Genomics offers anonymous sequencing to increase privacy and transparency in genetic testing.
Gaming is also being transformed by blockchain technology, according to this article.
And this ZDNet article describes 10 ways that enterprises are using blockchain today, including food/agriculture, media/advertising, tickets, health care, education and many other besides finance.
Facebook’s announcement of a new currency based on blockchain is another big story from this year. It appears that other companies may follow this path as well in the coming year.
Finally, there have been many articles regarding the potential use of blockchain to improve cybersecurity. Here are examples from IBM and three experts.
Governments Using Blockchain
In China, the Blockchain-Based Services Network (BSN) is being used for infrastructure management including smart city management.
In India, the government is preparing a national framework to support the wider deployment of blockchain use cases.
“Minister of state for electronics and IT (MeitY) Sanjay Dhotre said Wednesday that the government is drafting an approach paper on the National Level Blockchain Framework which discusses the potential for distributed ledger technology and the need for a shared infrastructure for different use cases. …”
Back in September, Computerworld presented this impressive list of case studies (in slideshow format) showing how governments around the world are using blockchain technologies to improve public service. The list includes countries ranging from the United Kingdom to Switzerland and Estonia to the U.S.
Earlier this year ICMA, in partnership with the National League of Cities (NLC) and the Government Finance Officers Association (GFOA), hosted an event following the recent release of the "Blockchain Technology: Local Government Applications and Challenges" whitepaper.
This article describes the ICMA event, and other blockchain challenges that local governments face when considering the use of blockchain, like competing priorities and sustainable funding.
“Although there has been some experimentation with blockchain at the local level, the experts agree that the significant amount of challenges around implementation are preventing the technology from gaining traction in local government. ‘Perhaps the largest challenge with blockchain is the data itself,’ said Truell. ‘Local governments still have structured data that will have to be moved into a digital platform before blockchain could be used.’ Truell also emphasizes that major changes to the law would be needed to make blockchain a viable option.”
Closing Thoughts on Blockchain
So back to the initial question: “When Will Blockchain Become a True Game-Changer?”
Despite the enormous amount of research into uses for blockchain technology and the large number of pilot projects using blockchain technology, many questions still remain. Experts are asking to see that “Killer App” that requires blockchain tech as the enabler.
My view is that 2020 may very well be that game-changing year. If not, we will certainly see tremendous progress, and some organization will release a true game-changing app based on blockchain technology in the early '20s.
What is your view? Please share your thoughts on blockchain and this article on LinkedIn in our online discussion.