The number of active Blockchain projects is increasing sharply. Blockchain spending is expected to grow by 88 percent between 2018 and 2019 alone. But what is striking: the vast majority of Blockchain projects have failed. This could be due to companies recognizing the opportunities the technology offers but lacking the know-how needed to implement such projects profitably. The solution could be: Blockchain as a Service.
Blockchain seems to have arrived in the marketplace. News about this technology is becoming increasingly commonplace. Dubai, for example, plans to use Blockchain to handle all trade transactions starting in 2020. In India, Mahindra is planning to use Blockchain to optimize delivery processes, while Toyota has similar plans in Japan. The World Economic Forum came to the conclusion that by 2025, 10 percent of the global gross domestic product will be stored using Blockchain technology.
At the same time, however, the World Economic Forum is seeking to dampen expectations from becoming too high. Respondents to the Blockchain study “Building Value with Blockchain Technology: How to Evaluate Blockchain’s Benefits” reported they expected an average return on investment of 24 percent for their early projects, but actually achieved only 10 percent. Of those surveyed who were yet to start a Blockchain project, 59 percent said they did not believe they would see a positive return. And only 38 percent of those implementing the technology developed a business case for doing so before making the investment.
The reason for this is has a lot to do with the current lack of expertise in the field. The World Economic Forum states: “Proof-of-concept projects are often led and developed by evangelists working within research and development. This is usually carried out under controlled conditions. The transition to production requires the involvement of stakeholders and can prove a real challenge.” While expectations may have been adjusted somewhat, there is no question that Blockchain could fundamentally change a number of business processes across various industries. Some people also speak of disruption.
Most Blockchain projects are limited. On average, they last just over a year. And so the question presents itself: does it make sense for companies to invest in their own hardware and software resources for Blockchain projects? Particularly since more than three quarters of CIOs have little interest in Blockchain projects, as the majority are interesting for individual business areas but less so as company-wide solutions. This also means that the respective business areas rarely seek the support of large IT providers, but opt instead for smaller, specialized Blockchain technology providers.
Blockchain technology can be used in all areas where large-scale and comprehensive exchange of data takes place to maintain data integrity.
Blockchain is fundamentally secure, since it doesn’t require any central entity, such as an intermediary. Every computer in the chain collects the same data. If one user transfers Bitcoins to another user, this is done directly from computer to computer. This is entered anonymously into a table and stored in parallel on all networked computers. So no single computer has any more information than the others. Malicious manipulation at any point along the chain is, therefore, either not critical or not possible. A wrong date alone cannot corrupt the whole system.