The Blockchain Hype Is Over — but the Future Looks Bright for Early Adopters
The blockchain hype is diminishing
The hype around blockchain, which we observed in the last 12-18 months, will continue to weaken in 2017, something we already started to notice in the second half of this year. But it’s not because blockchain is no longer interesting. Quite the opposite. There is a growing realization that blockchain applications are far more complex than the oversimplified view presented to the masses over the last few years.
The initial hype around blockchain was caused by the lack of detailed information and insufficient education. Media, companies, and organizations shared the excitement about blockchain’s potential. However, as they started to dig deeper, it became evident that their perception of the emerging technology was very shallow. The peak of inflated expectations is now behind them. Next year the discussion will revolve around real projects and real life situations where blockchain can find practical use.
Many blockchain use cases have undergone vigorous testing. Some ideas were parked or even discarded, while others developed further. There is growing acceptance of the fact that blockchain is not a magic wand that can solve everything.
One example is with the banking. When the news came through that some banks considered using blockchain, many assumed that it was for payment processing. It is now evident, that payments or crypto-currency will not be the primary area for blockchain in banking. We’re more likely to see blockchain being used for other applications like data protection, record keeping or assets trading.
Blockchain projects going to production
A critical mass of developers and early adopters that survived the hype, is now sending their first blockchain-based projects into production. These are not pilot projects from start-ups, these are core business products from various key industry players.
It is likely that the first production use cases will be simple. Simple on one side, but very practical on the other. For example, data protection companies will offer blockchain-based data fingerprinting for data authenticity verification. Other companies will start using blockchain for record keeping. We’re also likely to see blockchain-based electronic signature applications and other projects in this area. Next year will indicate where the market is going to move in the immediate future, led by the early adopters of this technology.
Implementations using multiparty smart contracts, cryptocurrency and other attractive but more complex blockchain features will likely be delayed until the market is comfortable with the simpler uses. Lack of legislative base and the limited number of early adopters will also delay introduction of complex blockchain applications. For example, blockchain payments will only make sense when the system is shared by a large number of banks. Since there is still a lot of unknown, banks will continue to sit on their hands until regulators, in different countries, come to a common understanding of the legal status of blockchain technology. For example, new legislation is needed to give official validity to blockchain-based electronic signatures to make them recognized in a court of law.
In 2017 blockchain-based applications will find their practical use in a number of industries. Early adopters will become market leaders and help blockchain to earn mainstream recognition.