Dipping a Toe or Diving in: Big Business and Blockchain
Major corporations are stepping off of the blockchain train, which has some believing that this means the end of the love affair between major corporations and distributed ledger technology.
This year will see the end of several blockchain companies, while other projects are walking back their anticipation for blockchain’s power to revolutionize their businesses.
Raising the Crypto Flag
Previously, Nasdaq Inc. was a standard bearer of both cryptocurrencies and blockchain technology. The corporation made previous claims about deploying blockchain technology for issuing private-company stock, as well as using it to facilitate shareholder voting. However, it has yet to use the technology in any currently functioning projects. Still, Nasdaq Inc. continues to examine uses for the technology and is currently looking into industry partnerships.
First to Market
Over half of the blockchain marketplace is made up by IBM and Microsoft. Most recently, IBM has released a kit for startups with interest in using the blockchain platform. Meanwhile, Microsoft has launched blockchain based tools for securing copyrights. Both of these projects are aimed at increasing the utility and adoption of blockchain technology. However, these programs aim at small scale adoption with the hopes that growing up with the technology will populate the ecosystem down the road.
This is seen as a work-around for some of the main difficulties in digital ledger technology. Though there has been an enormous amount of excitement around blockchain for things like product tracking, invoicing, and customer acquisition, few major companies are taking a leap into full integration. This is largely because of questions about security, scalability, and verifiability.
Concerns over Applicability
Investors and businesses once felt that adoption of blockchain was the entryway into the next age of the internet, but now analysts are beginning to temper their expectations for how quickly this technology will affect the bottom lines. It’s easy to understand why large multinational corporations are not throwing everything behind the relatively new technology. Blockchain businesses are unable to offer compatible software, which leads many companies to be concerned that they will be beholden to only one vendor.
This issue could be dealt with by setting business standards which is exactly what the Enterprise Ethereum Alliance is attempting to do. The organization is premiering a certification and testing program for blockchain software by mid 2019, which will assuage fears that companies will be stranded with only one vendor.
Further, IBM, which has more than 1,500 employees working on blockchain, said it’s still seeing strong demand. But growing competition could affect how much it can charge clients, according to Jerry Cuomo, vice president of blockchain technologies at IBM.
Currently, IBM and Microsoft are waiting for their massive investments to pay dividends, though they remain in the minority of companies that are exploring this technology. According to a recent Gartner Survey, only one percent of chief information officers (CIOs) stated that they had adopted any blockchain technology into their businesses. Only 8 percent of CIOs were in active trials for adoption of the technology. A staggering 80 percent stated that they had no interest in pursuing blockchain integration.
Rolling back the Blockchain
Several companies have rolled back plans for blockchain integration. ASX Ltd., the operator of the Australian national stock exchange, expected to have a settlement and clearing system based on the blockchain in 18 months. That was two years ago, and now the system is is slated to begin at the end of 2020 or beginning of 2021. Though this and other projects have not been abandoned entirely, it appears that many are putting a toe in the water rather than diving in head first.
Multinational businesses are the servants of many masters. While they are able to adopt cutting edge technology (hopefully to the benefit of their shareholders), they also have a great deal to lose. No one company wants to become a cautionary tale about adopting unproven technology.