Last year, the cryptocurrency and blockchain industry entered what many have dubbed “Crypto Winter”.
The market capitalization of this asset class fell from $830 billion to sub-$200 billion, layoffs by industry startups were commonplace, and the presence of the words “Bitcoin” and “blockchain” in mainstream media dropped off dramatically.
But ever since early-2019, things have seemingly been on the up and up for Bitcoin; the cryptocurrency has rallied some 100% on the year and blockchain has entered the mainstream consciousness once again.
In spite of this trend, Gartner, an S&P 500-listed global research and advisory firm, has asserted that blockchain is “sliding into the trough of disillusionment”. Here’s why the firm thinks so.
Blockchain Still an Underwhelming Trend, Gartner Asserts
According to a report from Gartner shared with technology publication The Next Web, blockchain is in the midst of the “trough of disillusionment” — the period of the age-old innovation adoption chart in which technologies either “make it or break it”, so to speak.
The chart below states that most technologies related to blockchain — including smart contracts, decentralized identity, smart contract oracles, and so on — are still at least five to ten years away from having a large impact on society, if at all.
Avivah Litan, an analyst and research vice president at Gartner, backed the firm’s chart by claiming that “Blockchain technologies have not yet lived up to the hype and most enterprise blockchain projects are stuck in experimentation mode.”
She added that blockchains are not yet “enabling a digital business revolution across business ecosystems and may not until at least 2028″, as these technologies are not yet scalable and technologically sufficient to tackle, say, Silicon Valley’s most pressing data concerns, Wall Street’s slow financial transactions, or what have you.
Litan did weigh in with some optimism, however. She argued that there are trends that may accelerate Gartner’s timeline to 2023 for the widespread adoption of blockchain.
The Gartner executive said that for this to happen, smart contracts will need to be portable, chains will need to be interoperable, and transactions should be private. Should this take place, “Web 3.0” will be that much more of a reality, she argued.
Not to Worry, Adoption is Taking Place
While Gartner is saying that the blockchain industry isn’t in the best place, there is a multitude of signs accentuating that cryptocurrencies and related technologies are entering the mainstream fray. Just look to recent developments in the Ethereum ecosystem as a perfect case in point.
Last week, we reported that an Icelandic branch of IKEA used “Tradeshift’s platform and smart contracts” built on the Ethereum blockchain to settle an invoice with Nordic Store.
That’s far from the end of it. Chicago-based financial services giant Morningstar, which deals with credit ratings and asset/market analysis, was revealed by Forbes to have begun delving into Ethereum, announcing intentions to migrate some of its credit ratings business to a blockchain system through Ethereum smart contracts and oracles.
And, Banco Santander, Spain’s largest bank, recently revealed that it had settled a $20 million bond entirely on Ethereum.
While all these cases of adoption are very local and small-scale, the three aforementioned companies have already lauded blockchain’s potential to change the business world.
Aside from Ethereum, firms like JP Morgan, Deutsche Bank, Samsung, IBM (especially IBM), amongst others have involved themselves in blockchain initiatives. While many of the blockchain projects from these corporate giants are being piloted, there is optimism that this technology may soon go mainstream — sooner than 2028 anyway.