LIVE NOW

Lack of interest and ability are blockchain usage’s main obstacles

Andrew Munro 4 May 2018 NEWS

Not every business can be an early adopter, and not every business needs to be.

A Gartner CIO survey has found low interest and even lower adoption of blockchain technology in most businesses.

Only 1% of CIOs indicated any kind of current blockchain adoption within their organisations, and only 8% were in short-term planning or active experimentation with blockchain. 14% were in the process of exploring its medium and long term benefits. The vast majority, 77%, said their organisations weren't interested and had no plans to start investigating or using it. The results varied by industry, with telecommunications, insurance and financial services all being the most actively involved with blockchain planning and experimentation, and transportation, government and utility sectors becoming increasingly engaged.



Balancing act

The state of the technology right now might be a balancing act for businesses. It's such a quickly developing space that the solutions devised today won't necessarily be the ideal long term option tomorrow.

"In my experience, most blockchain projects take about 18 months and then they have to be replaced, because the tech has shifted so much," Heudecker said. "These can be very strategic conversations, but everything is very short-term," said Gartner analyst Nick Heudecker. At the same time, prominent institutions like Moody's are warning that technological laggards will start feeling the pain in the near future.

The hype around cryptocurrency and distributed ledger technology has also turned it into a loaded topic. Many decision-makers might feel like they are being caught between an emotionally charged rock, and a short-sightedly dismissive hard place.

It doesn't help that among the businesses which want to adopt blockchain systems, a lack of hireable talent, coupled with some systemic barriers, are making adoption a painful process.

23% of the 293 CIOs who said that they're already into blockchain, either currently or in the short term, said it requires the most new skills to implement of any technology area, while another 18% said that blockchain skills are the most difficult to find. Another 14% said it requires the greatest change in the culture of the IT department, while 13% said implementing blockchain technology would require a change in the structure of their IT department.

The real challenge, said Gartner analyst David Furlonger, isn't just finding skilled blockchain engineers, but also retaining them.

"The challenge for CIOs is not just finding and retaining qualified engineers, but finding enough to accommodate growth in resources as blockchain developments grow," he said. "Qualified engineers may be cautious due to the historically libertarian and maverick nature of the blockchain developer community."

It's clear beyond a shadow of a doubt that trustless, decentralised systems like blockchain can deliver extraordinary benefits in the long term. But it's equally clear that slapping everything onto the blockchain is a bad idea.

The technology is also developing so quickly that the only way to keep up with the cutting edge is to be in front of it. The formation of dedicated industry groups and partnerships, where competitors jointly examine the potential of distributed ledger technology, might be one effort of doing it. Skilled blockchain engineers are hard to find, and pooling resources might be a useful way of going further with them. For example, the automotive industry's blockchain group MOBI has about 70% of global car production under its umbrella. Another example might be the web of partnerships that ties Fujitsu, Bosch and IBM to explore standardisation in decentralised IoT systems.

At the moment, most businesses might be in a "wait and see" holding pattern, as the cutting edge of the technology is being continually probed out and pushed forwards. Some are looking in front of that edge for a place to jump on, but most are probably looking well behind it without really knowing it. If nothing else, it's worth knowing where exactly one is looking.

For some perspective on that progressing edge, blockchain – the first generation of distributed ledger technology – is pushing its tenth birthday now, and is arguably already obsolete. Unless a business is actively pushing the technological edge forwards, or is exploring beneficial ways of bending old paradigms through decentralisation, "wait and see" is probably a good place to be.


Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, XRB

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Latest cryptocurrency news

Picture: Shutterstock

Latest crypto guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site