Enterprise Blockchain is in a “Trough of Disillusionment”

There are few people who have worked in the blockchain technology space for so long and maintained such a seemingly disinterested and skeptical perspective on the emerging technology as Tim Swanson. Through numerous books and a blog, Tim has shown a knack for going out of his way to do deep market research within the blockchain space.

This week on Let’s Talk Bitcoin, Tim Swanson, Director of Research at Post Oak Labs, talked with Epicenter’s Brian Fabian Crain and Sebastien Couture.

His most notable work within the space has happened as Director of Market Research at R3, the first blockchain enterprise consortium for the financial services industry. During his time at R3, Tim assessed several hundred entities — companies, startups and universities — working on some type of blockchain initiative. His experience gave a full range of good, bad and ugly business operations and blockchain propositions that existed in the early stages of this industry.

Whether you agree with his stoic perspective or not, it may be a good remedy for the mania that has resulted from Bitcoin’s phenomenal price increase this year. As new investors flood in the crypto community and more and more people begin talking about blockchain technology, it’s never a bad idea to be reminded of how the industry has developed.

“Historically, we’ve seen a lot of manias happen in tech: social media, solar panels, AR, VR, etc. I don’t see the benefit in becoming a fanboy in anything at this early, early stage.”

On the current state for the enterprise blockchain market

Swanson proposed that there has been a significant shift of attention in 2017 from enterprise blockchain to Initial Coin Offerings (ICOs), due in large part to the amount of money that has been raised this way. Referencing the Gartner Hype cycle, Swanson believes blockchain enterprise adoption is currently in the “trough of disillusionment.” This stage comes after the initial peak of expectations where interest wanes as experiments and implementations fail to deliver. This is also where many producers of the technology either give up or receive continued investment for improving the products to the satisfaction of early adopters.

“The problem as a whole for the enterprise blockchain space is that it hasn’t managed any of the expectations it initially set out to accomplish. In the beginning, there were brash claims like putting the entire United States equities market on a blockchain in less than a year. Over time, it became clear that something like that was not possible. Because of the unmanaged expectations coupled with the retail enthusiasm coming from the consumer side seeing how blockchain could help them, where in reality, enterprise is a long-term cycle and build-out, many people lost interest once they realized they could make money much faster through ICOs.”

Swanson listed a number of startups working on the enterprise blockchain side in New York, London and the west coast, including Digital Asset, ConsenSys Enterprise, Cobalt DL and Ripple, among others, as well as Clearmatics and R3, both of which Swanson still advises.

“If you look at funding for those companies — as an aggregate they’ve raised maybe $400-450 million dollars. For comparison — and it’s not an accurate comparison — ICOs in the month of June raised over $600 million dollars. It was a shift in enthusiasm from people who wanted to get very rich, very quickly. The fact of the matter, even for ICOs, is that you can’t bypass the requirement-gathering necessary to build a platform that can work with existing institutions and existing regulatory and industry requirements.”

“You can’t just build an aeroplane, convert it into a helicopter then sell it to a bunch of helicopter enthusiasts. Ultimately, somebody will have to build applications and that’s why building an ecosystem and community is so important.”

Why Aren’t There Any New Enterprise Blockchain Companies?

Swanson attributed the lack of new enterprise blockchain companies to the difficulty new startups face in working against the existing competition within the space. Established companies have a head start in acquiring the essential ingredients for success in the enterprise blockchain space: capital and some kind of partnership with regulators or players of the existing infrastructure.

Furthermore, Swanson suggested that most of the obstacles encountered by enterprise blockchain companies could be easily surmounted by larger players:

“Large enterprises like Oracle, IBM, Sap, Microsoft have the capacity and budgets to acquire any of the enterprise startups. Oracle alone could acquire all the enterprise startups themselves and not blink much of an eye.”

Transitioning from Proof of Concept to the Pilot Stage

Swanson stated that one of the most critical obstacles for enterprise blockchain startups to be mindful of are the principles of financial market infrastructure (PFMI). These are a set of standards adopted after the 2008 financial crisis which the international community considers fundamental to strengthening and preserving financial stability.

“These principles are intended to prevent a snowball/domino affect where a local problem could potentially take down an entire system,” said Swanson. Due to the nature of these principles and how they interact within existing financial infrastructure, changing legacy infrastructure by integrating a blockchain that does not comply with these principles is far more time consuming and costly.

“Within these large corporations, you can’t just turn off legacy infrastructure, then turn on your blockchain version and continue production. Things have to be run in parallel for a while. It takes time and talent.”

The future of the blockchain in enterprise is not necessarily tied to more infrastructures, Swanson concluded. “Instead of building out more infrastructure, I am much more interested in seeing applications built on top of existing infrastructure.”

Watch the full episode to hear Swanson on busting hype, the recent ICO spike and the rise of cryptocurrencies as a new asset class among other things.

Source link

Related posts

18 Thoughts to “Enterprise Blockchain is in a “Trough of Disillusionment””

  1. 醫學美容-牙膏-睡眠-cosmetic-wiki

    擺烏龍頒錯獎!關於奧斯卡你不可不知的5件事 Marie Claire (HK) Edition 想不到剛剛結束的第八十九屆的奧斯卡頒獎典禮竟然頒錯獎,擺了個大烏龍!除此之外,還有四個你不可不知的趣事和話題,一齊看看! 1. 拿錯信封頒錯獎 The #Oscars best pictu

  2. Football Solutions European Qualifiers - Georgia-Republic of Ireland - Line-ups

    Unsurprisingly both Alan Pardew and Harry Redknapp are rooting for Bayern Munich to beat Chelsea in the Champions League final. We don’t want Chelsea to win! Pardew and Redknapp fear missing out on Champions League spot

  3. futbol.run UEFA Women's Champions League - Gintra - Algimante Mikutaitė

    It is the East End shootout of the under-fire managers and the stakes could not be higher as Sam Allardyce and Alan Pardew prepare to face their former clubs. Sam could be close to getting the bullet and Pardew is also under fire but who has the ammunition to win shootout at Upton Park

  4. ETIAS Visa

    It’s a shame you don’t have a donate button! I’d without
    a doubt donate to this superb blog! I suppose for
    now i’ll settle for bookmarking and adding your RSS feed to my Google
    account. I look forward to fresh updates and will talk about this blog with my Facebook group.
    Chat soon!

  5. palmetto pest control

    These are truly fantastic ideas in concerning blogging.
    You have touched some fastidious points here. Any way keep up
    wrinting.

  6. Environmentally Friendly Pest Control Bradenton

    Hey there! This is my first visit to your blog!
    We are a group of volunteers and starting a new
    initiative in a community in the same niche. Your blog provided us valuable information to work on. You have done a outstanding job!

  7. Online casino

    … [Trackback]

    […] Find More to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  8. devops advice

    … [Trackback]

    […] Read More here to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  9. ทางเข้า maxbet

    … [Trackback]

    […] Find More Information here on that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  10. maxbet

    … [Trackback]

    […] Find More here on that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  11. magic mushroom microdosing guide​

    … [Trackback]

    […] There you can find 47211 additional Info to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  12. sbo

    … [Trackback]

    […] Here you can find 91875 more Info to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  13. เงินด่วน ออนไลน์

    … [Trackback]

    […] Read More to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  14. 4-aco-dmt kaufen deutschland

    … [Trackback]

    […] Read More here on that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  15. sbobet

    … [Trackback]

    […] Find More here to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  16. maxbet

    … [Trackback]

    […] There you will find 51074 more Information to that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  17. Side hustle

    … [Trackback]

    […] Read More on that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

  18. Aller voir

    … [Trackback]

    […] Read More here on that Topic: tradingbtc.com/2017/12/23/enterprise-blockchain-is-in-a-trough-of-disillusionment/ […]

Leave a Comment