The visionaries will forge ahead, those hoping for immediate industry and process transformation will give up. This is the answer I usually give when asked for a one-sentence summary of how I see 2018 shaping up in the blockchain technology arena.
Following blockchain technology feels a little like living in two parallel universes: one is the world of press and vendor hype, fueled in equal measure by commercial self-interest and a genuine desire for innovation, and which remains firmly in the phase of irrational exuberance. The other is the world of enterprise business and technology professionals actually working on blockchain projects; this world is firmly anchored in the phase of rational assessment, and everyone’s agreed that large-scale, widespread deployment of blockchain-based (or indeed blockchain-inspired) networks isn’t imminent. The inhabitants of this second universe also recognize that you need to be prepared to be in it for the long haul, as the true transformational potential of blockchain-based networks will take a long time to materialize, for non-technical as much as technical reasons.
That’s not to say that this latter group will persevere with all of the blockchain initiatives they have started. Forrester’s 2018 blockchain predictions reveal that we’ll see some serious pruning of projects in 2018. Initiatives will increasingly be assessed against standard business benefit models, and those found wanting will not be given the go-ahead, or they’ll be stopped if already underway. The projects that proceed will fall into three categories:
- Pure R&D. These projects are focused on understanding what it means to develop a blockchain-based system. Ideally, they’ll work on real use cases; but the ultimate goal is investigation and learning, not necessarily delivery of a working system.
- Immediate business benefit. These projects cover two bases: One, learning how to work with this nascent technology. Two, delivering an actual system that can be deployed in a real business context. Many of these projects are intra-company, and that’s ok: A large global organization can achieve significant efficiencies by putting certain processes on an internal blockchain. Other projects are inter-company, involving multiple ecosystem players; those going live during 2018 are likely to remain comparatively small-scale and focus on the improvement of existing processes rather than reinventing them.
- Long-term transformational potential. This is the territory of the visionaries, who recognize that to realize the true value of blockchain-based networks means reinventing entire processes and industries as well as how public-sector organizations function.
Those who persevere with their blockchain initiatives are not only aware (sometimes painfully) that the technology is still at a very early stage of development, but also understand that this isn’t really about technology, but about business. This is what sets them apart from those who follow the siren call of tech industry promises without sufficient grasp of what a blockchain network is all about, both from a business and a technology perspective; the resulting vanity projects will invariably fail. In 2018, we expect to see a number of projects stopped that should never have been started in the first place.
Going back to where I started: Forrester sees 2018 to be the year of reckoning for blockchain initiatives. Those who failed to translate the headlines into reality will write off their investments and give up, while others that have a deep understanding of the technology and its transformational potential in the long run will continue to forge ahead. To quote Amara’s Law: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”