Trough of Disillusionment: Blockchain winter has come

Republished excerpt of article by Lucas Mearian, Senior Reporter, Computerworld

In a joint report
for the Monitoring, Evaluation, Research and Learning (MERL) Technology
conference this fall, researchers who studied 43 blockchain use cases
came to the conclusion that all underdelivered on claims.

And, when they reached out to several blockchain providers about project results, the silence was deafening. “Not one was willing to share data,” the researchers said in their blog post.[

In their research, Christine Murphy, a social researcher at Social Solutions International and John Burg and Jean Paul Pétraud, fellows at the U.S. Agency for International Development, found a proliferation of press releases, white papers and persuasively written articles touting the many attributes of the distributed ledger technology (DLT).

“However, we found no documentation or evidence of the results
blockchain was purported to have achieved in these claims. We also did
not find lessons learned or practical insights, as are available for
other technologies in development,” the researchers reported.

“Despite all the hype about how blockchain will bring unheralded
transparency to processes and operations in low-trust environments, the
industry is itself opaque. From this, we determined the lack of evidence
supporting value claims of blockchain in the international development
space is a critical gap for potential adopters,” they added.

Blockchain pilots and
proofs-of-concept, however, are not without value, the researchers
noted; in the end, the real value of blockchain deployments may not be
technology itself, “but rather as an impetus to question what we do, why
we do it, and how we could do it better.”

The scathing evaluation of blockchain by the research trio was backed
to some extent by industry analysts, who said the marketing hype around
it has created unrealistic expectations, especially as enterprise use
is not yet fully baked.

Avivah Litan, a Gartner vice president and distinguished analyst,
said while the report’s findings came as no surprise to her, it lacked
balance. The researchers did not bother to ask why projects had not
delivered on goals, such as improving transactional efficiency,
transparency and privacy, she said.

“Back in early 2018, we’d already said… 99% of enterprise projects
are dead end; 99% don’t need the technology; they don’t get out of the
lab. They’re a result of CEOs fear of missing out – the FOMO
phenomenon,” Litan said. “Having said all that, it’s a very valuable
technology. People started trying to use it before it was ready for
prime time. That’s true in the cryptocurrency world and in the
enterprise blockchain world.”

Gartner gauges the maturation of new technology through a “Hype Cycle,”
a graphic-based lifecycle that follows five phases: from the Technology
Trigger, when proof-of-concept stories and media interest emerges, to
the Plateau of Productivity, when mainstream adoption occurs – if the
technology is more than niche.

Among those five Hype Cycles is the Trough of Disillusionment, when
interest wanes as pilots and proofs-of-concepts fail to deliver and
technology providers either work out the kinks and improve the
technology to the satisfaction of users, or ultimately fail and die out.

Garner’s Hype Cycle for new technologies.

Enterprise blockchain technology that’s centrally administered like a
traditional database yet still part of a peer-to-peer architecture that
immutably stores encrypted transactions is headed into the Trough of
Disillusionment, Litan said.

“Blockchain winter has come,” Litan said.

Earlier this year, a Gartner CIO survey revealed on average that only 3.3% of companies worldwide had actually deployed blockchain in a production environment.

In a blog post,
Litan listed eight hurdles needed for blockchain to advance and meet
the goals stated by technology providers hawking it as a cure-all for
virtually any international, transactional network need – from fee-less,
cross-border payments to supply chain tracking.

Read the full article at Computerworld

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