Gartner correctly tags Blockchain as just going over the peak of “inflated expectations” in its Hype Cycle report. The analyst firm just announced in a recent study that fewer than 1% of CIOs are implementing blockchain for any purpose in their companies this year.
In the next stage of Gartner’s cycle, as blockchain gains traction, it will also be subject to scrutiny and doubt.
When it comes to evaluating blockchain solutions, scrutiny and doubt are good things. Between misinformation, “announcement-ware” and fraudsters, there are lots of land mines to avoid. For those who brave the minefield, the there is an opportunity to improve efficiency and create new areas of growth.
Blockchain’s basic components of shared records, enforceable rules and secure transfer of information could improve upon a currently complex system of spreadsheets, diverse reporting schemes and paper contracts.
As with most endeavors, getting started can be the hardest part, so let’s keep it simple. Here are suggested areas to focus on:
Blockchain is shiny, and people like shiny things. Companies have found it easy to gain press and notoriety by sprinkling a little blockchain into marketing messages without having a substantive product or even product road map. At best, these companies are well intentioned but naive. At worst, they’re fraudsters.
When in meetings with blockchain vendors ask: Is their solution “live”? How do they define “live”? Are customers actively using their platform? If so, what are examples of how? Have they received feature requests from live customers? If so, what?
Do an Implementation Reality Check
Many Blockchain solutions are noble in their intentions, yet unrealistic in their approach. In multiple industries, there are novel blockchain approaches which require drastic changes in supply chain procedures and industry practices in order to be effective. These pitches usually boil down to: “It’s easy: all you have to do is change everything about everything you are currently doing.”
These vendors may be right in theory, however, industries don’t rip and replace overnight, thus these solutions are not realistic (at least not anytime soon). The vendors are also underestimating the enormous complexity (and value) built up over decades in the current ecosystem.
As MIT recently proved in an experiment to see how quickly students would adopt a gift of blockchain currency, even rational people that stand to gain something, hesitate to try new things. If the vendor dismisses the work of getting lawyers to accept smart contracts or finance teams to manage new virtual currencies, then beware of false promises.
Try to Find the Added Benefit
This one is tougher to spot, but usually boils down to: “We are doing everything exactly the same, except now we are using blockchain.” This gives people a nice warm fuzzy feeling by adopting a new technology; unfortunately, it also comes with no benefits. What problems is the vendor solving with blockchain?
Putting a report in blockchain form that doesn’t make it faster, more secure, more accurate or more transparent isn’t worth the trouble. Blockchain is technology, not a product. Simply adopting blockchain doesn’t do anything, it has to change something for the better.
Focus On Business Outcomes, Not Blockchain Purity
We are in the midst of what I dub the “blockchain purity wars.” People seem eager to argue the technical minutia of what does and does not constitute blockchain. Like most wars, these conflicts do more harm than good. Stay focused on how technology can solve important problems, like securely controlling payments or verifying audience targets, not whether a vendor uses tokens vs. non-tokens, or ethereum vs. hyper-ledger.