Blockchain has been held up as a revolutionary, autonomous, largely decentralized ledger aimed at upturning a centralizing internet and perhaps chipping away at the foundations of modern fiat currencies.
In a big sense it has been a disappointment. Real-world applications have been slow to show themselves and its promise as an easy swap-out for existing technologies simply hasn’t come to pass.
Slow transaction speeds have been a major restraint. Some liken it to a dawdling database.
Yet, hope remains that the right application will pop up. In fact, some proponents claim 2019 might be a breakout year, the year it proves itself, with applications demonstrating that transactional middlemen can be eliminated and deal friction reduced.
Don’t hold your breath. This year is more likely another year of building, with its premise come December still ending with a question mark.
Sure, IBM has been aggressive in the space with such partners as Walmart and Merck and has shown that supply chain is probably a valid use case.
Yet even with the $3.1 billion of venture money that CoinDesk says was poured into young companies in 2018, included into apps targeting insurance and advertising, a multi-year horizon will likely be necessary for the fruits of the labors to appear. Or so seems the consensus of investors and experts.
Still, some momentum is building. A 2019 study from Deloitte, found organizations from a mix of sectors, including technology, telecommunications, healthcare and government, are expanding blockchain initiatives. While only about a quarter report beginning a blockchain deployment, a majority considers it a priority.
Gartner, too, spies momentum. The research firm estimates the business value generated by blockchain will grow to slightly more than $176 billion by 2025, before surging to $3.1 trillion by 2030.
And invested capital, while falling, hasn’t disappeared. Blockchain startups raised $822 million through 279 VC deals in the first half of 2019, according to Outlier Ventures.
“I think people are more realistic about what can be achieved,” said Mark Radcliffe, a partner at DLA Piper. “There is more reality with what’s happening.”
Of special significance is Facebook’s Libra initiative, which could spark interest in the space. Meanwhile, Telegram drew a lot of attention with its ICO and a new generation of cryptocurrencies and protocols, including EOS, Solana and Polkadot, are pushing Ethereum to improve.
Entrepreneurs, such as Marc-Antoine Ross, CEO of dfuse, see another change taking place: more developers coming to work with blockchain and better entrepreneurial teams forming. The tooling also is evolving, he said.
“That is really shifting these days,” Ross said. “I think in the next 12 months we’re going to be blown away by amazing experiences.”
Ross is seeing growing interest from enterprises as well. Dfuse thought it would take a year before enterprise customers were knocking at its door, but now they are.
“It has been a positive surprise for us,” he said.
Still, patience will be necessary. There are legitimate use cases, but their range is narrow. Supply chain is one example. Healthcare data could be a second.
But interest from large financial customers has been more restrained than anticipated.
“Institutional adoption is happening, but at a little slower pace than people expected in 2017,” said Hu Liang, CEO of Omniex, which provides a trading platform for crypto assets.
However slow and steady might not be a bad thing, now that some of the hype has dissipated.