Blockchain Momentum: Key Indicators Show Acceleration
Each day brings new opinions of blockchain adoption. One article details how blockchain adoption is about to accelerate. The next article explains why blockchain acceptance will be delayed. Industry practitioners that are trying to understand blockchain and its potential impact may find it challenging to make sense of it all. It’s no wonder that those involved in the day to day business of running a financial institution may assign a low priority to committing resources to the technology.
For industry practitioners, it would be helpful to understand early indicators that may signal blockchain is gaining traction and acceptance. Reliable insights can be found; some might seem to be obvious and others may not be as such.
First, and seemingly obvious, are announcements by institutions of blockchain development. This provides concrete indication of acceptance. One recent such example, is the announcement by the state of Delaware that it will be developing a blockchain network[1]. Being the first project by a large, public institution, it is very high profile. When the Delaware blockchain is successful, there will likely be additional announcements of similar undertakings.
Another identifying point will come from the vendors supporting financial industry infrastructure. This could take two forms. First, it could be anecdotal arising in client discussions. An example may be technology vendors suddenly incorporate blockchain into conversations. They aren’t directly pitching the idea of implementing blockchain, just getting an idea of the awareness and interest levels. The second form will be announcements by major industry vendors. The announcement could be of an acquisition of a blockchain developer, or of an internal project to develop blockchain capabilities. One example is the investment by Fiserv in the blockchain developer Chain[2].
The potentially most important point will be from industry regulators. In March the Office of the Comptroller of the Currency (OCC) published a framework to “improve how the OCC evaluates innovative products, services, and processes…”[3]. The paper indicates the OCC is receptive to new methods, products, and services, but wants the innovations to have appropriate risk management and corporate governance. Further clarification is necessary and will likely be forthcoming.
A fourth indicator will come from outside of the financial services industry. New uses are being identified for multiple industries. The most important use, however, could be humanitarian. For example, in May 2016 the organization id2020 held a summit at the United Nations to discuss the role of blockchain in providing identities to people who have been victims of war, famine, and similar situations[4]. In just a short time, blockchain has gone from an unnoticed underlying technology of a crypto-currency to being discussed at the U.N. as a tool to help the impoverished.
There is solid consensus that blockchain is a revolutionary and transformational technology. Additional announcements of projects and further regulatory guidance will beget more announcements. It is like the cartoon where a snowball rolls down the mountain. At first the snowball is small and slow. As it moves, it increases in size and speed until it cannot be stopped. Right now, the blockchain snowball is near the top of the hill. But it is accelerating and soon will be unstoppable.
[1] Delaware Office of the Governor, “State of Delaware Unveils Blockchain Initiative to Leverage Potential of Smart Contracts” April 5, 2016
[2] Finextra “Visa, Citi, Nasdaq, Fiserv and Capital One back blockchain startup Chain” September 10, 2015
[3] OCC “Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective” March 2016
[4] Id2020.org