Beneath the headlines, there’s arguably been the early stirrings of a sea change in the blockchain industry. There’s a new trough of disillusionment, but this time its those working with blockchain applications, not bitcoin, who are being affected.
Described as the period in a hype cycle where interest wanes as experiments fail to deliver, the term was first used in the industry as bitcoin’s price declined in 2014 amid overinflated expectations about its use in e-commerce. Now, the innovators in the ecosystem seeking to apply blockchain technology for use by financial incumbents are showing the first signs of a similar frustrations.
The spinning of the tires on such attempts perhaps hasn’t been audible given that, while bitcoin’s problems were and still are largely public, the institutions experimenting with blockchain have done their best not publicize those struggles.
Still, there has been a noticeable change in tone among those working close to such efforts.
For all the investment, it remains increasingly unclear exactly how banks will use blockchain technology or distributed ledgers, or if the areas where it seems most effective will be lucrative or interesting enough for incumbent financial firms to pursue.
As noted by Coin Sciences CEO Gideon Greenspan in a recent CoinDesk opinion piece , shared ledger efforts have hit a roadblock when it comes to confidentiality, as every institution operating in such environments today sees every transaction.
"This turns out to be a huge issue, both in terms of regulation and the commercial realities of inter-bank competition," Greenspan writes. "While various strategies are available or in-development for mitigating this problem, none can match the simplicity and efficiency of a centralized database managed by a trusted intermediary."
Elsewhere, Matthew Spoke, one of the leaders of Deloitte’s Rubix project, an effort aimed at advancing the use of distributed protocols, wrote an opinion piece in which […]
