Published on the 10/04/2017 | Written by Donovan Jackson
Is blockchain ready for prime time?…
While Gartner had blockchain hitting the Peak of Inflated Expectations in late 2016 with anticipations that this year would see the technology heading down the precipice and into the Trough of Disillusionment on its Hype Cycle, there is ample evidence of its move to practical deployments right here in ANZ. That’s the view of Justin Gray, country MD of Accenture in New Zealand.
“The blockchain is moving from proof of concept to production, so I wouldn’t agree that it is in the Trough of Disillusionment. What we’re seeing is an acceleration in investment and an acceleration in awareness of the technology and what it can do,” Gray told iStart.
He said there is, perhaps predictably given that blockchain is most commonly associated with cryptocurrency Bitcoin, a lot of discussion of how the distributed ledger technology can be applied in financial services. “From my interactions with clients, the idea of blockchain as a technology which can have multiple interesting use cases is becoming much more real. There is a pivot underway from experimentation and turning it into something real.”
Gray cited Vector and its partnership with Power Ledger for peer-to-peer energy trading as an example. “There are a couple of other trends which are driving collaboration; Bitcoin is often discussion for incubators and startups. And the R3 consortium is a demonstration of the level of interest in blockchain internationally, so the collaboration is become more real and [through R3, a collaboration of 70 banks and other financial services companies] are willing to not see the underlying infrastructure as a potential competitive advantage, but rather thinking about how to create interlinked solutions.”
Closer to home, NZTech’s FintechNZ, too, has a focus on blockchain, among its other areas of interest.
Gray said the power of blockchain lies in its ability to share information with confidence and control, independent of intermediaries. As such he said Accenture uses it internally to provide ‘a clean audit trail of information within the organisation’. “Blockchain supports the ability to govern and manage compliance in a simpler way. It is use cases like this along with continued forward investment and experimentation which will see blockchain continuing to pivot to become a prevalent part of daily business.”
In Gray’s view, the most likely use cases are those where it is possible to make better use of existing infrastructure. “If you think of blockchain as a technology and an underlying platform, there is massive opportunity for cost saving in infrastructure if that platform can be distributed across existing computers. With better use of infrastructure, businesses are left with the resources to invest elsewhere.”
He added that blockchain has the potential to ‘reduce friction’ as it provides an immutable record of things done (or not done) – so, wherever there are rules which must be complied with, blockchain can provide the necessary record without the need for someone, like an auditor, to later check and verify.
That’s what got a food safety VP at Walmart excited about blockchain, according to an article in the New York Times. “I became increasingly convinced that maybe we were onto the holy grail,” said he, of the technology’s potential to track food safety through the value chain.
Gray said innovation using blockchain does need to progress beyond the obvious financial sector applications. “There are great use cases in financial services, but anywhere you have a ledger or transactions, it can be applicable. Anywhere there are intermediaries and information being exchanged which needs to be verified, blockchain can help. It presents an opportunity to do things more efficiently.”
Oh, and Gartner? When, late last year it said blockchain was right on top of the Peak, it noted: “As a portent for the rise of the programmable economy, the potential of this technology to radically transform economic interactions should raise critical questions for society, governments and enterprises, for which there are no clear answers today.”
Even so, that Trough beckons. TIBCO CTO Matt Quinn, who sees much potential in blockchain, said one major barrier is the inability for the technology to scale. It is likely that as the use cases are hammered out, other practical problems with implementation, not the least of which could be the brakes applied by vested interests, may come to light.