Blockchain: The new hype 2016 / 2017 or a fundamental change?

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“Please, not again the next hype everyone is talking about.”

Maybe this is your first thought about blockchain. Others will like it as a great chance for security and saving IT cost. What is really behind this new buzzword?

Blockchain is a technology to store data decentralized multiple times in different locations (Peer-to-Peer). From a security point  the decentralization is great. If one location is hacked this can be identified and the location be blocked. Nobody can manipulate data because they are stored several ways.

The most know blockchain application everyone knows is bitcoin. The bitcoin concept exists since 2008, blockchain (or how ever it was called) is flying around since then.

Blockchain can be used for everything like:

  • International Payments
  • Online Marketplaces
  • Billing / Accounting Control
  • Certificate Of Authenticity (COA)
  • Equity Trading
  • Digital Right Management
  • Copy Protection
  • Supply Chain
  • etc.

Is this just a hype with no real potential or is it a true technology we keep to have an eye on?
Gartner’s Hype Cycle are a great overview where a topic is staying today and how long it takes to be set and used as a standard. One of the most interesting Hype Cycles is the one about emerging technologies.

Hype Cycle for Emerging Technologies, 2016

emerging-tech-hc-2016Gartner1)Gartner’s 2016 Hype Cycle for Emerging Technologies Identifies Three Key Trends That Organizations Must Track to Gain Competitive Advantage – https://www.gartner.com…

As you see Blockchain is short before the top peak.

Looking one year back, there is no blockchain within the Hype Cycle. This is something which raises up very quick as a term. Gartner is saying that it will take 5-10 years to reach the plateau of productivity. Is it really taking so long?

Hype Cycle for Emerging Technologies, 2015

emerging-tech-hc2015Gartner2)Gartner’s 2015 Hype Cycle for Emerging Technologies Identifies the Computing Innovations That Organizations Should Monitor – https://www.gartner.com…

Blockchain is a way to work decentralized. There is no need to have a bank to send money for example. In other words spoken it’s a market place like the Amazon Marketplace without Amazon.

This is a huge danger for  banks, Amazon and others whose business model is based on the centralization. With their centralization they can claim money for their services and have control about processes and data. To control processes and data gives them a huge knowledge and force. Now they are loosing their status as a “middleman” and their business model. New player are coming up. In the case of transferring money this are the app carrier and the one who is paying out cash.

The web started as a “Internet of Information” and changed meanwhile to an “Internet of Value”.

Think about Whatsapp. Would Facebook have bought Whatsapp if this would be a blockchain application?

Now a new question raises up, the question about data security. With the decentralized data storage data are stored “somewhere” and multiple times. It is not only about forgery-proof data, just the access to data has a huge commercial value.

Over many years banks have reached a high level of trust. Blockchain now will call IT and trust into question.

There is a great article about “Understanding the blockchain hype“. Three disadvantages for blockchain are described there:

  • “There is also no need for a ‘51 percent’ attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished.”  3)Understanding the blockchain hype – https://www.computerworld.com.au
  • “The bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing power — it’s time consuming and expensive.” 4)Understanding the blockchain hype – https://www.computerworld.com.au
  • “Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.” 5)Understanding the blockchain hype – https://www.computerworld.com.au

Let’s do a move… IoT stands for three points, all of them will benefit from blockchain: “New Products & Services”, “Simplifying and Shorten Processes” and “Customer Experience”. New products & services can raise up much quicker and cost will drop with blockchain because less IT infrastructure is needed for someone who builds up an app for example.

We will see a new Internet raising up, a peer-2-peer Internet of trust. This is not about web 2.0 or web 3.0, it’s a fundamental change. We can name it “Process Cloud” or just “Cloud 2.0”. Today data or software (SaaS) is within the cloud, with blockchain processes will be done in the cloud.

As we see there is a huge move in processes and system. There are many risks, but also chances. Blockchain can have the power to change everything. Today we are talking about Digital Transformation and have things like Big Data, Cloud or Social in mind…. but this are just small points compared with the power of blockchain.
Coming back to Gartner and the forecast that blockchain will take 5-10 years to reach the plateau of productivity. Does it really take that long? Bitcoins are still there other things will come up. To change the entire processes or maybe the entire Internet this can take much longer than 10 years. However it’s something to think about if we talk about IoT.

References   [ + ]

1.Gartner’s 2016 Hype Cycle for Emerging Technologies Identifies Three Key Trends That Organizations Must Track to Gain Competitive Advantage – https://www.gartner.com…
2.Gartner’s 2015 Hype Cycle for Emerging Technologies Identifies the Computing Innovations That Organizations Should Monitor – https://www.gartner.com…
3, 4, 5.Understanding the blockchain hype – https://www.computerworld.com.au

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