Five ways businesses are investing in blockchain
The United States alone is predicted to triple blockchain spend by 2022, from US$1.1 billion this year, to US$4.2 billion in 2022.
That’s because the technology is redefining the tenets of trade in the digital era. It has dispersed to a range of industries, and although the adoption of distributed ledger technology (DLT) is most prevalent in financial sectors; the technology is increasingly gaining a foothold in various other fields, such as providing traceability in the food industry.
As blockchain technology is picked up by various sectors, there is certainly no one-size-fits-all style of implementation. Each business will have its own unique motivation and intent for the technology, and this will influence how it is used and the architecture employed. With that in mind, Gartner experts laid out five approaches businesses are taking to deploy the technology.
While not all businesses may agree to the labels, they serve to show what factors are driving decisions to invest, and how those are impacting end solutions.
# 1 | FOMO solutions
One of the fully-centralized blockchain solutions is dubbed Fear of Missing Out (FOMO). In this case, the blockchain system is developed for in-house use and is led by the company itself.
The purpose of these blockchain initiatives is prompted, of course, by the fear of missing out on the digital zeitgeist. These organizations choose to adopt blockchain largely for the sake of adopting it and are looking to achieve the same success as front-runners. However, a lack of planning and a comprehensive understanding of technology’s value leads to poor implementation, and often abandonment, of initiatives.
On the one hand, organizations unfamiliar with the technology could consult experts of blockchain pioneers; on the other, attractive blockchain packages may sometimes be too good to be true.
# 2 | Trojan horse solutions
Trojan horse solutions are often packaged nicely. They may have a respected brand behind it, robust technological foundations, and have a reputation for solving expensive, wide-ranging problems in industries. But the catch is, clients are often required to share a portion of the company’s data or transfer some control to the main blockchain owner.
In general, the solution is provided by the central organization with superior influence in the implementation of technology such as tech giants, dominant supply-chain groups, or an organization of blockchain developers. The risk in companies adopting this type of blockchain solution is that they become dependent on the provider’s solutions and are bound to contract terms. Subsequently, the technology owner may exert more control over the company’s data and operations.
# 3 | Opportunistic solutions
Companies motivated to seek various approaches to address known and widespread problems, such as flawed systems in record keeping, are regarded as blockchain opportunists
These opportunists choose to develop in-house blockchain solutions to solve existing problems, and are less inclined to approach existing blockchain giants for support. In this context, opportunists experiment on blockchain initiatives and, even if full integration is not possible, the attempt offers an experiential payoff.
# 4 | Evolutionary solutions
Another approach of blockchain takes on a more evolutionary path whereby a solution is designed to develop over time to use tokens independent of centralized governance.
To illustrate, the Union of European Football Associations (UEFA) is collaborating with several tech companies to combat ticket resell and eliminate illegal broker activities. In order to do so, ticket buyers are encouraged to download an app with all transferred tickets tracked and recorded in a blockchain.
This is an example of the start of an evolutionary blockchain solution, beginning with a centralized body and eventually tapping into the secondary market.
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# 5 | Blockchain-native solutions
The final archetype of blockchain solutions is developed by innovation-driven groups or startups to launch new markets or disrupt a current business model.
An example of this archetype is Woolf University, a blockchain-inspired initiative with aims to disrupt the traditional education system and create a digital educational society. Woolf University connects professors and students in the platform. Here, blockchain helps protect professors’ and students’ data and payment details.
Native blockchain solutions will inject a stream of innovation and creativity into legacy industries.
This list could surely be longer, but it goes some way to present the different kinds of blockchain solutions and approaches available to enterprises. Not approach is necessarily right or wrong, or will be a success or failure— it all depends on the company and its needs, and its willingness to experiment and invest in technology which could prove a boon to business, or prove more a lesson learned.