Though many executives at large enterprises still feel blockchain will disrupt their industries, exuberance for blockchain amongst them has deflated in the past two years, says Deloitte in a recent global blockchain survey report.
The company’s 2018 global blockchain survey of 1053 “blockchain-savvy” managers at companies doing more than $500 million a year has found that 40% of them are wary of blockchain’s true efficacy.
The figure is higher in the US, says Deloitte, where 44% of execs are skeptical.
These figures are up from two years ago, when 34% of executives expressed similar skepticism, the latest survey finds.
An additional, 21% of global and 30% of US respondents, “say they still lack a compelling application to justify (blockchain’s) implementation.”
Blockchain, a method of settling and encrypting data across multiple “nodes” has been characterized as everything from an industrial panacea to an expensive, slow database suitable only for Bitcoin or similar “permissionless” (meaning extra-judicial) “value-transfer” systems.
But excitement emanating from Bitcoin around how blockchains might enable enterprises to automate middlemen and cut costs has led companies to invest millions. Even while the survey states that blockchain is not ready for prime time, a good percentage of respondents do expect the tech to “disrupt” their organization.
Consortia like R3 and Hyperledger have emerged to purportedly guide businesses in their assessment and incorporation of blockchain tech.
Deloitte partly attributes declining exuberance for blockchain to the fact that legacy companies have been unable to accommodate what Deloitte says are the cultural shifts needed to accommodate blockchain.
“Ultimately, it’s more of a business model enabler than a technology,” say the authors of the report.
But blockchain-skeptics like developer and consultant Jimmy Song have long argued that real blockchains are far too expensive to use in private enterprise, and say that industries don’t in fact need a blockchain, which requires “decentralization” (leaderless, consensus-based governance) to function.
“You (private enterprise) don’t need a blockchain, says Song, and skip the consortium. You may need to make some of your business structures and processes more efficient, but as far as tech is concerned, you probably just need better encryption on your regular database.”
And while Deloitte, and others, are now admitting that, “blockchain is really just a sophisticated ledger system,” the company does not believe that increased skepticism has yet led to major “blockchain” sector contraction. On the contrary, the company believes, “blockchain consortia will continue to gain traction, in the near term.
Deloitte says 29% of 2018 survey respondents told them they have,”already joined an existing consortium,” with, “nearly 45 percent saying they are likely to join one within the next year.”
Maybe that’s where the smart money’s at: 13% of respondents told Deloitte they’re thinking of starting their own blockchain consortium.