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With the recent collapse of FTX, investors are now worried about the future of the cryptocurrency. While some blame technology, let’s remember that people are corruptible, not the blockchain. The ledger-based technology that enables cryptocurrency is as much of a breakthrough today as it was yesterday. Unfortunately, crashes like FTX play on fears that blockchain is more of a hype than a breakthrough. Once and for all, will blockchain not prove very useful in the enterprise?
As blockchain technology created a new way of thinking about money and wealth creation, many in the corporate IT space began considering using blockchain technology to streamline business processes. For example, the global supply chain is still not working as well as it could. More than a decade later, corporate adoption of blockchain technology is crawling at best, and has stalled across the board at many of the world’s largest companies.
Blockchain is an emerging technology, which means its full potential and practical applications are still evolving. This generates hype as visionaries dream of realizing the full potential of the technology, usually long before anyone else realizes its usefulness. This is the downside of emerging technology, as hype often obscures reality.
See Also: The Blockchain Is Everywhere: How To Understand It
do you remember the cloud
When cloud computing first came out, it was an emerging technology. Software developers have strived to create SaaS applications where people buy a software service instead of installing the software on each workstation. Two decades later, the end point for the evolution of cloud computing revealed itself without fanfare. Behind the scenes, cloud computing is responsible for billions of data exchanges every day.
Everyone takes the cloud for granted today. But go back 20 years and the same hype led to similar conversations about cloud computing. Indeed, go back half a century and you will find hype surrounding the use of computers in the enterprise. There was even excitement about driving cars instead of horses. The point is that the hype is part of the adoption process that all emerging technologies must go through to become behind-the-scenes technologies.
Facts behind the hype
Blockchain technology and the movement of digital information across different locations is no exaggeration. Human civilization needs blockchain because it protects the process of moving digital data from one place to another in a physical realm that humans cannot see. Once a bitcoin is transferred, the record of that transfer does not change.
What may change is the cyber security surrounding transmission. Since software is a product of human creation, errors will occur when using the technology. Our society deals with this on a regular basis. Consequently there will be errors; that’s a fact.
Another key point is that blockchain technology needs to use other technologies with no attached hype — for example, securing cloud computing SaaS applications over Wi-Fi. When every other part of the information exchange is secure, working out the bugs is an elimination process.
See also: How blockchain and cryptocurrency can revolutionize businesses
Trailblazer vs Trailfollower
Although some technologists perceive blockchain as overrated, what does that mean and what should companies do about it? Hype in the tech sphere is a cultural phenomenon fueled by followers waiting for someone else to take the lead. Everyone knows blockchain is the future, but only a few want to be at the forefront. Unfortunately, it doesn’t help if a pioneer fails. Business leaders worry and withdraw.
Provocatively, it’s collapsing like FTX working to legitimize the hype surrounding emerging technologies. Spectacular collapses usually result in serious advances for the technology to live up to its hype. For the company, the hype is centered on supply chains as the world looks for a better way to manage global shipping.
Making blockchain work for the company
Walmart and other big retail companies need blockchain technology or something like that, which is driving a lot of the hype. The global supply chain isn’t working as it could, so the company needs blockchain, much like the healthcare industry needs nurses because of a labor shortage. In this light, overhype is a motivator to take action or queue up and wait for the enabler.
Business decision makers need the motivating endorsement of software developers with a game-changing mindset. In addition, the software applications must be strongly supported by robust security specifically designed to manage the movement of digital information from one point to another.
Related: How blockchain can have a positive impact on global issues
Enterprise adoption of blockchain is slow, but not unexpected. Our modern society now wants everything. If the digital revolution has taught us anything, change is incremental. The best way to get familiar with blockchain is to use it in small test programs. Once these smaller programs work as a system, scale the operations together and then troubleshoot from there.
Patience and hype need to get along better. However, pioneers in the tech sphere must be patient or risk falling victim to hype. Focus on small steps that represent progress — for example, leveraging an expansive global supply chain of which only a tiny portion is controlled by blockchain. Once the blockchain-backed supply chain leg is running smoothly, please take a step back and understand how it fits into the larger supply chain. The process and facility systems required for incremental change ignore hype.