As Bitcoin and other cryptocurrencies grow in popularity, the technology beneath it—blockchain—grows as well.
Essentially a permanent, unchangeable ledger of transactions, blockchain has several potential enterprise uses outside of currency. Although it is a relatively young technology, it has been the center of experiments in multiple industries, including energy, manufacturing, and banking.
Even companies outside of those industries are looking into ways to digitally transform their business, or parts of it, using blockchain. Singapore Airlines is moving their frequent flyer program to a blockchain-enabled virtual wallet, and shipping giants FedEx and UPS are looking at ways to increase transparency in the shipping industry and track their supply chains using blockchain.
But could the technology be overhyped? A December Gartner report found only 10% of companies will achieve digital transformation by 2022 by using blockchain, adding that the technology is more of a long-term investment than a one-size-fits-all quick fix.
TechRepublic talked to five experts and practitioners to get their take on blockchain value. The consensus: Some aspects or early uses are overhyped, but the technology itself is not.
SEE: IT leader's guide to the blockchain (Tech Pro Research)
Here are their full explanations.
1. Michela Menting, digital security research director, ABI Research
"I don't believe blockchain is overhyped; Bitcoin may be, but not the underlying infrastructure on which it is built. The architecture is transformative in many ways, and especially the decentralization concept. The digital age has a tendency to enable revolutionary ideas; look at smartphones, online commerce or social networking and the behemoths they created.
"Cryptocurrencies are just the first iteration of what blockchain is capable. The hype, the divisions, the furor around a first generation technology is certainly incredible; it is enough to belie arguments that it is simply a fad. As the technology itself matures, and new use cases are tested and tried, the value of blockchain will be difficult to deny. I think we are in for an exciting decade for blockchain!"
2. Martha Bennett, analyst, Forrester
"Yes, it's definitely overhyped. My biggest fear is that the hype is going to be detrimental: As many have pointed out, the current approach is a bit like 'When you've got a hammer, everything looks like a nail.' This tech-led approach is bound to lead to failed projects, which in turn will lead to disillusionment with the technology; but it's not the technology's fault when it's used in scenarios that either don't need a blockchain-based approach, or where non-technology factors derail the project.
"Also, a lot of the headlines make it seem like the technology is a lot more mature than it is, and the projects more advanced than they are; ultimately, this can only lead to disappointment."
3. Michael Fauscette, chief research officer, G2 Crowd
"I don't think [blockchain is overhyped]. It's a reasonable, simple, and yet elegant way to verify transactions, and has many uses that add quite a bit of value."
SEE: What is blockchain? Understanding the technology and the revolution (free PDF) (TechRepublic)
4. Kat Kuzmeskas, founder, SimplyVital Health
"Some aspects of the blockchain are overhyped, some are underhyped. Right now, there's been a lot of focus on the amount of money pouring into the blockchain space. But what's really a much more interesting story is the amount of talented people who are just starting to identify and work on huge societal problems that the blockchain can help disrupt—like healthcare. We're just on the cusp of radical breakthroughs that can begin to attack some of the most challenging problems of our day."
5. Richard Ma, founder, Quantstamp
"The blockchain technology itself is underhyped - because not a lot of people actually understand the technology. There are a lot of discussions around the overall phenomenon - but very little interest in new fields that the technology can be applied in. The technology is still very early stage, but it has the potential to change transparency in government and NGOs and create a global transaction layer for individuals on a global scale."
- Quick glossary: Blockchain (Tech Pro Research)
- Executive's guide to implementing blockchain technology (ZDNet)
- 18 new IT jobs created by Bitcoin and blockchain (TechRepublic)
- Why the blockchain belongs on the CXO roadmap (Tech Pro Research)
- Blockchain: A cheat sheet (TechRepublic)
- What is blockchain? And 5 other questions your boss needs answered ASAP (TechRepublic)
- Blockchain explained: It builds trust when you need it most (CNET)
Olivia Krauth is an Education Reporter at Insider Louisville.