Blockchain brings benefits but comes with hurdles

Interest in blockchain is growing among a range of enterprises – from major corporations to upstart innovators. But where is blockchain likely to be most useful, and how disruptive will blockchain deployment be if done prematurely? These questions were among those recently explored by analysts at Juniper Research.

Juniper’s new Blockchain Enterprise Survey found that nearly six in 10 large corporations are actively considering, or are in the process of, deploying blockchain technology.

In “Talking the Talk,” The Green Sheet, Jan. 23, 2017, issue 17:01:02, Patti Murphy defined blockchain as a “method of structuring data that underlies crypto-currencies, like bitcoin.” Blockchain employs distributed ledger technology, which is considered a trusted way to track ownership of assets without needing a central authority. The reported benefits include faster transactions, lower cost and less chance of fraud.

Almost 400 company founders, executives, managers and IT executives participated in the survey. Among respondents who have reached proof-of-concept stage for blockchain, 66 percent stated they expect to integrate blockchain into their systems by the end of 2018, Juniper reported.

Researchers found that companies that would benefit most from employing blockchain are those that need transparency and clarity in transactions, are dependent on paper-based legacy storage systems and transmit a high volume of information. Findings also pointed to land registry and digital fiat currency as sectors with the most opportunity for blockchain. Fiat currency is legal tender backed by the government that issued it.

Juniper also cautioned that “companies may have underestimated the scale of the blockchain challenge.” Internal disruption and interoperability are major concerns for those transitioning to blockchain, especially for those who deploy the technology without having first considered alternative options. “In many cases, systemic change, rather than technological, might be a better and cheaper solution than blockchain, which could potentially cause significant internal and external disruption,” stated Windsor Holden, the report’s author.

Respondents also indicated concerns increased as companies proceed toward full deployment, including concerns about clients possibly refusing to embrace blockchain, according to Juniper.

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