What’s Stopping Blockchain From Winning Global Enterprises
As Gartner releases a report on why blockchain may not hit mainstream until about in a decade, the Global Blockchain Leader at EY consulting firm hinted what could be the main challenge hindering the emerging technology from hitting its full potential.
EY’s Paul Brody says that while a public blockchain like Ethereum is great for several business processes, that its transaction data is public may prevent some enterprises from using it because they need transactional privacy.
“We believe that blockchains would be the biggest transformational technology for enterprises since ERP (enterprise resource planning),” he says about why EY is focused on the long run to make it possible for enterprises to use the Ethereum blockchain on the mainnet at the ongoing fifth Ethereum Developer Conference (DevCon 5) in Japan. “ERP got enterprises to coordinate internally; blockchain is a tool that is going to allow networks of companies, entire business ecosystems, to transact seamlessly with each other to build complex supply chains with a very low overhead and a incredibly high efficiency.”
The view by Brody, who maintains that his firm is all-in on Ethereum – i.e. builds its applications on the Ethereum ecosystem, somewhat aligns with the Gartner Inc. 2019 Hype Cycle for Blockchain Technologies. The cycle shows that blockchain is sliding into the Trough of Disillusionment where interest in the emerging technology has waned as experiments and implementations have so far failed to deliver.
According to Avivah Litan, analyst and research vice president at Gartner, blockchain is yet to enable “a digital business revolution across business ecosystems and may not until at least 2028, when Gartner expects blockchain to become fully scalable technically and operationally.”
She adds that blockchain technology space is currently witnessing many developments that will eventually “change the current pattern” even as blockchain platforms become scalable, interoperable and supportive of smart contract portability and cross-chain functionality by 2023.
“They will also support trusted private transactions with the data confidentiality required,” Ms. Litan says, noting that these technology advances will take blockchain and the decentralized web (or Web 3.0) closer to being mainstream. “Over time, permissioned blockchains will integrate with public blockchains, and will take advantage of shared services while supporting the membership, governance and operating model requirements of permissioned blockchains”.
Regardless, Brody maintained that it‘s important to have “incredibly high standards of security and privacy for public blockchains”. He adds that no corporation or enterprise is going to sign up for anything blockchain-related if “they know that their competition is going to see what they are buying, or how much they are paying or where it’s going”. With blockchain spending set to rise in countries like China from US$79.5 million in 2017 to reach US$1.67 billion by 2022 (at a CAGR of 83.9%), the next few years could be big for the emerging technology.