How Blockchain Will Transform Industries in the Next 10 Years

27 January 2020 in Industry

How Blockchain Will Transform Industries in the Next 10 Years

The Gartner 2019 Hype Cycle for Blockchain business forecasts that in five to ten years the technology will transform business operations in most industries. But currently, many fields and applications of blockchain are somewhere between the stages of inflated expectations or disillusionment in the effectiveness of the distributed ledger.

Gartner also surveyed CIOs on blockchain perceptions, with 3,102 respondents in 89 countries and across major industries. It found that 60 percent expected to adopt blockchain to some degree over the next three years. However, it was also concluded that businesses lack the digital infrastructure and clear blockchain strategies to use the technology to the best effect. In the previous year, the same report found that only 3.3 percent of companies in the world had deployed blockchain technology to productive effect. 

In the research, banking and investment services industries showed interest in innovating traditional operations and processes, and almost 18 percent of CIOs said they have already adopted or will adopt blockchain technology in the next 12 months. However, only 7.6 percent of all CIOs surveyed described blockchain as game-changing.

Vice President of Gartner Research, Avivah Litan, listed in a blog post the challenges in the integration of blockchain technology. These include the development of smart contract technology, transaction risk assurance, data confidentiality, efficient consensus algorithms, and technically scalable blockchains.

Gartner also predicts continued and further use of digital tokens but notes that more work needs to be done on standards, organizational structures, and regulatory frameworks before blockchain can become a mainstream technology and reach its potential in productivity.

Among its many applications, blockchain technology is being recommended in the retail industry for counterfeit prevention, inventory management, and tracking. Walmart has already implemented blockchain to track products through the supply chain. Gartner suggests that in retail, the real value of blockchain will be in new innovations, such as loyalty schemes in which customers are offered digital currency to be used in purchasing goods.

When integrated with IoT and AI, blockchain has the potential to transform retail processes, as well as influencing monetary and data flows and the centralized model of market power, according to Gartner. This will impact business models in all industries, but it is conditional on the adoption of whole blockchain ecosystems, which include decentralization and tokenization.  

Another challenge is the creation of a blockchain consortium comprising multiple companies. Though blockchain is transformative in its various applications, it requires the coordination of different enterprises. It also faces traditional processes that are not easily changed.

Gartner recommends for CIOs to educate business leaders and executives in blockchain opportunities, establish proofs of concept and develop thought leadership in IT. Each industry should have different expectations with regards to the timelines of blockchain adoption and CIOs should prepare for numerous challenges in the initial stages.