A report published by Forrester Research suggested that around 90 percent of blockchain initiatives being pursued by American companies will be withdrawn by the end of 2018. In addition, projects that do near completion will never be incorporated into the business models of the organizations. Companies are evaluating whether the inclusion of distributed ledger technology will provide their businesses with substantial advantages, and most of them are finding that “no” is the more plausible answer.
Proponents of blockchain technology may have overstated its capacity to help corporations. While the future may bring better opportunities, the ambitious projects launched in 2018 seem likely to end up nowhere.
Even if this is true, all is not necessarily lost: Early blockchain experiments can turn into substantial advantages for companies at a later stage when blockchain development has reached a more thoughtful and mature level.
The Need for a More Thoughtful Approach
The motivation to develop blockchain implementations for current systems can be categorized into three genres.
1) Research and Development
Under this category lie projects that companies initiated to simply understand the potential of the technology. In addition, research and development provides an avenue to check the possibility of including a workable prototype in the organization based on the findings.
2) Present-Day Business Management
Companies that feel they have learned the essence of this technology may try to incorporate it into their work to develop a more practical system. Naturally, these attempts are customized to ensure that the ecosystem of the corporation benefits to a great degree and replaces the present system of the company as soon as possible.
3) Blockchain Visionaries
This genre includes individuals and groups who recognize the potential of blockchain technology as something that can change the industrial landscape of countries as we know them.
A practical route to incorporating this technology on a professional level includes attempts to ask the office to gradually adopt technology, instead of withdrawing the present system at first. Even if a self-established blockchain system offers a 15 percent savings on operating costs, if the cost of deletion of the system results in inefficiency, you need to re-evaluate its worth. For companies, alpha and beta working models will result in a safer solution on account of the advanced programming interfaces (APIs) having backward compatibility (easily shifting to the original system of work).
The Need for Sensible Blockchain Development and Developers in Companies
Naturally, companies need to be critical of blockchain technology and its rational implementation in their business models. Developers are required to warn the top brass that any workable model that can be made today is likely not to fit in optimally for every technology they own at present. This discouraging reality often acts as an incentive for companies to withdraw funding.
The research firm Gartner noted that this technology has reached levels of practical implementation in barely 1 percent of information offices, with a further 8 percent attempting to experiment with it only to check whether it will add value to the organizational structure. Seventy seven percent of the executive officers surveyed by Gartner stated that they have no interest in switching to blockchain technology. These statistics are a direct reference to the overhype of the technology as a “global game changer.”
Failing innovation is not necessarily something to be demarked, but a futile investment can be very costly for many corporations. The competitive status of markets today may not allow room for such drastic changes with large calculated risks.
The Importance of Blockchain Consortia
One way of safely experimenting with this innovative technology is through the formation of a consortium on a local level, or possibly even an international level, with like-minded companies. The productivity of this model can be justified by a greater number of benefits and aims that companies will have for the technology on a collective scale. Deloitte explained some of the benefits in a relevant article:
- The cost of development can be shared, so risks in investment can be averted.
- Each member can host a network node, thereby sharing the responsibilities.
- Trust among stakeholders is built.
- Companies can speed up their capacity to adapt to the technology.
- Consortia attract leading players in the country to form partnerships and derive reciprocating benefits.
- Companies are granted greater control over the functionality of the developed model.
The commercialization of blockchain technology is bound to rely on the success of these consortia. In the coming years, the projected rise in the number of such groupings that avail themselves of the collective benefits will serve as evidence of how individualistic approaches to blockchain technology are not likely to work. While the product of research may not be a workable system that replaces the operations in your workplace, any gains in terms of development and understanding will lead to like-minded businesses willing to invest and associate with the consortia you are a part of. In this experimentation stage, it may be a great decision to step up your blockchain game and get to know the technology as a company to spot future opportunities.