Possibilities and potential can get one a long way in the business world, but at some point, that must give way to real-world results. This balance between excitement over potential and real-world accomplishment may have never been more delicate than in the blockchain industry.
Today, hundreds of blockchain-based projects and companies over almost every industry carry the potential to change the ways in which we transact and conduct business across the globe. Some of these projects are starting to produce real results, while others, including some of the industry’s biggest names, still only hold value by virtue of their potential and have yet to live up to expectations.
Bitcoin Has Yet to Make a Real Impact
The most well-known cryptocurrency, Bitcoin, has yet to attain the global adoption its advocates have been predicting. In fact, the majority of all Bitcoin transactions are not for the result of commercial transactions or storing of wealth, but rather speculators trading on exchanges. Heavy trading in Bitcoin is a far cry from the long-term potential applications that form the basis of its valuation such as a replacing fiat currencies for purchasing and salaries and creating new jobs.
What’s more, the continuing tribal mentality in the Bitcoin world seems to have worsened. The Bitcoin hard fork that created Bitcoin Cash was followed by another hard fork, which created Bitcoin SV. This immediately led to a battle for hash power between Bitcoin Cash and SV which still rages on today. The factions of Bitcoin are at war, and at present there is no end in sight.
Yes, Bitcoin still has the potential to be the de facto mainstream, decentralized, global currency. Unfortunately, it lacks the required value and ease-of-use for consumers and businesses to take it up on a mass scale. Many hope that scalability projects like the Lightning Network will help increase usage and adoption, but as it stands today, these are still only hopes and not reality.
Etherium Isn’t Faring Any Better
Ethereum, another of the industry’s other high-profile cryptocurrencies, has similarly been unable to achieve any sort of mass adoption to date. Touted as the new decentralized internet, Ethereum has almost no working decentralized applications, while the ones that are in operation are severely lacking in users. Applications with the highest number of users are currently cryptocurrency exchanges, games, or gambling applications. At most, these applications have 2,500 daily active users, a figure which is laughably small for a project currently valued at over $17 billion.
There is a great deal of hype around Ethereum 2.0, which is set to move the blockchain from proof-of-work to proof-of-stake in an attempt to solve its scalability problems. However, whether this will lead to wider adoption of the blockchain is unclear. For now, Ethereum still lags behind in its usability and applications.
Gambling and Gaming are First Movers
While arguably not the most meaningful industries for disruption, both gambling and gaming are proving to be the areas in which blockchain solutions are starting to gain traction.
Fraud has a long-time problem in the gambling industry due to a lack of adequate transparency. Blockchains are solving this with provably fair games from lotteries to online poker. For gamblers, transparent and provably fair gambling is a significantly more attractive alternative to relying upon a third-party to ensure security and fair gaming. There are already a variety of blockchain-based casinos and gambling avenues on the market, with many more on the way.
Online gaming is another sector which blockchains have found early success. Gaming was one of the first industries to utilize digital currencies before the proliferation of blockchains, and it is now benefiting from the practice. Popular games like World of Warcraft have their own currency which players can use to purchase in-game items. Implementing blockchain technology on these platforms makes it easier for developers to create and monetize digital goods, and create trustworthy channels for gamers to trade and sell their goods at any time.
Following the success of Cryptokitties, there have been a variety of virtual games that similarly make use of blockchain networks. In addition, games like Decentraland, in which users can build and control virtual worlds, are growing in popularity. Games such as these allow anyone to build and sell their own creations within the game, creating an entire economy within these platforms.
B2B Solutions are Making the Jump
B2B solutions are another area in which blockchains are making headway; distributed ledger technology is finding ways to seamlessly integrate with existing business processes. As Deloitte noted in its recent 2018 Global Blockchain Survey, businesses will begin to put more resources behind blockchain solutions and as a result, “come to better realize how it can improve their business processes and their bottom lines.” Of the over 1,000 senior-level executives surveyed, 95% expect their companies to invest in blockchain technology this year, with 65% expecting their companies to invest at least $1 million in the technology over 2019.
In supply chain, businesses are utilizing blockchains to track goods from production to end consumer. One such blockchain solution, VeChain, has already made strides in bringing this concept to market. The blockchain company has partnered with infrastructure giant DNV GL to improve the efficiency of global supply chains and increase transparency of products and suppliers. In the United States, Albertsons, the 2,300-store grocery chain, has started testing product tracking using the IBM Food Trust blockchain platform to help with food safety.
In other news, AT&T announced it would collaborate with IBM and Microsoft to create a suite of blockchain solutions for enterprise customers. The company hopes its solutions will help customers solve complex business problems via an enterprise-grade blockchain environment and trusted cloud platform.
Still a Long Way to Go
The bottom line is that the potential which blockchain advocates have so vocally touted has yet to be realized, and blockchains have yet to prove their worth. However, we are still in the early days of an industry which has much more growing to do. After all, it took over 30 years of development and gradual adoption before the internet hit its stride; one might reasonably expect that the true value of blockchains will come to fruition in a significantly short time period than that, and in some cases in more sudden and disruptive fashion. Time will tell.