Head of Strategy and Planning
Of all trending topics, Blockchain probably has the most hype. Venture capital funding for blockchain startups was $1 billion in 2017, a World Economic Forum survey suggested 10% of global gross domestic product (GDP) will be stored on Blockchain by 2027, and the past two years have seen more than half a million new publications on the crypto company.
Despite the hype, it’s clear Blockchain is a nascent technology. Very few organisations have managed to apply Blockchain, and even fewer can actually explain what it is. Will it actually breakthrough in 2020 or is Blockchain an un-trend?
With rather murky beginnings, Blockchain is emerging from cryptocurrency as a technology in its own right, and there are numerous cases of brands putting it into action, although not often consumer facing:
The Fizzy travel insurance app from AXA uses Blockchain to automatically pay insurance if flights are delayed
Walmart uses the IBM Food Trust Blockchain for greater traceability and provenance of produce
Looking at Blockchain patents filed, it’s clear that certain categories with heavy datasets are finding it useful – IBM, Bank of America and MasterCard lead the way. But outside of finance, its application isn’t often as clear.
McKinsey conducted research to understand the strategic importance of Blockchain in certain industries, finding that technology, finance and the public sector all had high potential impact and feasibility. Most industries (like retail, automotive and utilities) were in the middle with not as many clear uses (McKinsey, Blockchain beyond the hype, June 2018)
Blockchain’s short-term value will predominantly be in core industries dealing with money transfer or high data loads. Beyond that, McKinsey suggested it may be three to five years away from feasibility at scale.
In media and advertising, there are efforts to use Blockchain to help safeguard transparency of the supply chain and cut ad fraud – something that Blockchain’s decentralised, distributed digital ledger is designed to address. But progress will be slow with a lack of standardisation in the use of Blockchain itself.
In summary, at present its a back-office function that’s unlikely to be high in public consciousness. But its potential impact of making services faster, more secure and more universal will be known. Our advice is not to get carried away with the hype, to understand potential implications of Blockchain on your business and industry, and to watch this space.
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