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With the recent collapse of FTX, investors are now concerned about the future of cryptocurrency. While some blame the technology, we must remember that people are corruptible, not blockchains. The ledger-based technology that enables cryptocurrency is as much a success today as it was yesterday. Unfortunately, crashes like FTX play into fears that blockchain is more hype than success. Will blockchain once and for all prove not very useful in the enterprise?
When blockchain technology spawned a new way of thinking about money and creating wealth, many in the enterprise IT space began thinking about using blockchain technology to streamline business processes. For example, the global supply chain is still not working as well as it could. More than a decade later, enterprise adoption of blockchain technology is crawling at best and has stalled across the board in many of the world’s largest companies.
Blockchain is an emerging technology, which means its full potential and practical uses are still evolving. This creates hype as visionaries dream of using the technology to its full potential, usually long before everyone else sees its usefulness. This is the downside of emerging technology, as hype often masks reality.
Related: The Blockchain Is Everywhere: Here’s How To Understand It
Do you remember the cloud?
When cloud computing first appeared, it was an emerging technology. Developers struggled to develop SaaS applications where people bought a software service instead of installing the software on each workstation. Two decades later, the end point for the development of cloud computing revealed itself to no fanfare. Cloud computing is behind the scenes and is responsible for billions of data exchanges every day.
Everyone takes the cloud for granted today. But go back 20 years, and the same hype has motivated similar conversations about cloud computing. Indeed, go back half a century, and you’ll find a hype about using computers in the enterprise. There was even excitement about driving cars instead of horses. The point is that the hype is part of the adoption process that all emerging technologies must go through to become a behind-the-scenes technology.
Facts behind the hype
Blockchain technology and the movement of digital information across disparate locations is not overstated. Human civilization needs blockchain because it protects the process of moving digital data from one place to another in a physical realm that humans cannot see. Once a Bitcoin is transferred, the record of that transfer does not change.
What may change is the cyber security around the transfer. Since software is a product of human creation, bugs will arise from using the technology. Our society regularly deals with this. Therefore, there will be bugs; that is a fact.
Another crucial point is that blockchain technology must use other technology without attached hype – for example, securing cloud computing SaaS applications using Wi-Fi. If every other part of the information exchange is secure, working out the bugs is a process of elimination.
Related: How Blockchain and Cryptocurrency Can Revolutionize Businesses
Trailblazer vs. trail follower
Although some technologists perceive blockchain as overhyped, what does that mean, and what should the enterprise do about it? Hype in the technological sphere is a cultural phenomenon driven by followers waiting for someone else to lead. Everyone knows blockchain is the future, but only some want to be pioneers. Unfortunately, it doesn’t help when a pioneer fails. Business leaders get worried and retreat.
Provocatively, it collapses like FTX, which works to legitimize hype for an emerging technology. Spectacular collapses tend to spur serious progress in making the technology live up to its hype. For the company, the hype centers on supply chains as the world looks for a better way to manage global shipping.
Making blockchain work for the enterprise
Walmart and other large retail businesses need blockchain technology or something similar, which is driving a lot of the hype. The global supply chain is not functioning as it could, so the enterprise needs blockchain much like the healthcare industry needs caregivers due to a shortage of workers. In this light, over-exploitation is an incentive to take action or fall in line and wait for the pioneer.
Enterprise decision makers need motivational buy-in from software engineers with an innovative mindset. Moreover, the software must be strongly supported by robust security specifically designed to manage the movement of digital information from one point to another.
Related: How Blockchain Can Make a Positive Impact on Global Issues
Incremental change
Enterprise adoption of blockchain is slow but not unexpected. Our modern society wants everything now. If the digital revolution has taught us anything, it’s that change is incremental. The best way to get comfortable using blockchain comes from using it in small test programs. Once these smaller programs are working as a system, scale the operations together, then work out the bugs from there.
Patience and hype need to get along better. However, pioneers in the technology sphere must be patient or risk falling victim to hype. Focus on small steps representing steps forward – for example, using a comprehensive global supply chain with only a small part controlled by blockchain. Once the blockchain-backed supply chain section is working without bugs, please step back and understand how it fits into the larger supply chain. The process and organizational systems required for incremental change do not pay attention to hype.
