Lack of interest and ability are blockchain usage’s main obstacles
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.
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
- Brace for impact: Cryptocurrency industry faces heavy regulatory blow
- Blockstream unveils Liquid Securities: Security tokens for Bitcoin sidechains
- Bitcoin astounds by rising $1,000 overnight
- Deloitte: The blockchain debate is over, and blockchain won
- Bitcoin bears and altcoin bulls took a thrashing this week