Tuesday, May 09, 2017

Blockchain Hype Cycle Entering a New Phase

Blockchain, the much-hyped technology that formed the underpinning of the digital currency “Bitcoin” has been at the forefront of technology innovation discussions since 2011.

Technologically, Blockchain is a decentralized ledger, or list, of all transactions across a peer-to-peer network. Such transactions are visible to those on the network simultaneously and therefore transactions can be consummated more quickly. So Blockchain offers a great deal more efficiency, as well as security, because the visibility means that untoward manipulations will be spotted quickly.

At first it was touted as particularly revolutionizing the worlds of financial services and accounting, along with insurance, health care, and others.

The others include digital asset management, which could be one of the more promising applications, because it could provide disintermediation between digital asset issuers, application developers and consumers. This could be huge.

For the first few years, speculation and activity was frantic, with soothsayers promising a worldwide revolution.

In August, 2016, Gartner Group declared that blockchain had reached its peak of inflated expectations, which meant that if it followed the hype cycle, it was about to head into the trough of disillusionment.

There hasn’t been as much disillusionment with blockchain as there was with some other technologies that enjoyed flurries of high expectations, such as XBRL and cloud computing, but there are signs that it is indeed entering a new phase.

One of these signs shows up in a report by KPMG on developments during the past year in the fintech area. That report showed that investment in blockchain had declined during 2016, compared to the previous year. However, it stated that interest continues.

That interest is now zeroing in on finding economically viable applications for blockchain. This could indicate that we are already on the slope of enlightenment and searching for solid productive applications.

There are signs that the plateau of productivity will be reached quite quickly.

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