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How blockchain will evolve until 2030 and today's hype versus reality

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  • How blockchain will evolve until 2030 and today's hype versus reality

    Generally, anyone looking to open a restaurant would need to go to various government agencies to obtain the required certifications. For example, the owners may need a health certification, worker’s comp certification or a liquor license depending on the type of establishment. For each of these certifications, the owner will have to produce essentially the same documentation.

    In British Columbia, the government for the city of Victoria decided that, as a matter of social good, it would create a blockchain platform to allow access to all of the restauranteur’s information, creating a “restaurant passport” for each owner.

    Rather than control all the data itself, the Victorian government developed a decentralized system. This means owners now control all their information and the consent switches to the individual. Not only can the government agency then verify the information, the owner can control who has access to the information and for how long. Additionally, the system is portable, allowing owners to open a restaurant in a different city using the same information.

    This type of blockchain, called blockchain enhanced, increases efficiencies while continuing to drive economic growth. But where does blockchain fit for other organisations?

    “Ask yourself this question, what are we building and where does it fit in this kind of model?” said Christophe Uzureau, Gartner VP, Analyst. “Where is it going to take you in terms of value proposition?”

    Victoria’s government had a clear, narrowly defined focus for this proof of concept (POC), but CIOs need to understand what blockchain is, what it could be and, importantly, how to explain the value to the business.

    Explore blockchain hype versus reality

    According to the 2019 CIO Survey, while 60% of CIOs expect some kind of blockchain deployment in the next three years, it’s not a focus; only 5% of CIOs rank it as a game changer for their organisation.

    Most organisations have only explored blockchain on small, narrowly-focused POCs. But top performers are already considering how the technology could be combined with complementary tech such as artificial intelligence (AI) and the Internet of Things (IoT) to create entirely new business models.

    Even if the technology is not quite advanced enough to launch this initiative now, CIOs should begin exploring these potentials and gathering support from their leadership team.

    It’s key that CIOs first explain the components of blockchain. True blockchain has five elements.
    Distribution: Blockchain participants are located physically apart from each other and are connected on a network. Each participant operating a full node maintains a complete copy of a ledger that updates with new transactions as they occur.

    Encryption: Blockchain uses technologies such as public and private keys to record the data in the blocks securely and semi-anonymously (participants have pseudonyms). The participants can control their identity and other personal information and share only what they need to in a transaction.

    Immutability: Completed transactions are cryptographically signed, time-stamped and sequentially added to the ledger. Records cannot be corrupted or otherwise changed unless the participants agree on the need to do so.

    Tokenization: Transactions and other interactions in a blockchain involve the secure exchange of value. The value comes in the form of tokens but can represent anything from financial assets to data to physical assets. Tokens also allow participants to control their personal data, a fundamental driver of blockchain’s business case.

    Decentralization: Both network information and the rules for how the network operates are maintained by nodes on the distributed network due to a consensus mechanism. In practice, decentralization means that no single entity controls all the computers or the information or dictates the rules.

    Understanding each of the elements, and how they come together to form a true blockchain, gives CIOs a framework to explain the technology to executives and clear up misconceptions.

    The Gartner Blockchain Spectrum

    To help CIOs understand blockchain’s current reality and its future evolution, Uzureau shared the Gartner Blockchain Spectrum and discussed how blockchain will evolve through 2030.

    Blockchain enabling technologies: 2009-2020

    This early phase of blockchain-enabled experiments is built on top of existing systems to reduce cost and friction in private, proprietary activities. They have only limited distribution capabilities to a small number of nodes either within or between enterprises.

    Blockchain-inspired solutions: 2016-2023

    The current phase of blockchain-inspired solutions is usually designed to address a specific operational issue – most often in terms of inter-organisational process or record keeping inefficiency. These solutions generally have three of the five elements: distribution, encryption and immutability

    Blockchain complete solutions: 2020s

    Blockchain complete offerings, starting in the 2020s, will have all five elements, delivering on the full value proposition of blockchain including decentralization and tokenization.

    Blockchain enhanced solutions: Post-2025

    Blockchain enhanced solutions offer all five elements and combine them with complementary technologies such as AI or IoT.

    Read more