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Blockchain Enters 'Trough of Disillusionment' on Gartner's Hype Scale

Interest in blockchain technology is waning, research firm Gartner said in its latest “Hype Cycle for Emerging Technologies” report.

Gartner included blockchain, along with four other emerging technologies, as one of five trends that can blur the lines between humans and machines, according to a news release on August 20. Blockchain technology is at the edge of the “trough of disillusionment” phase in the cycle, though it predicts that the technology may reach the “plateau of productivity” within the next decade.

The “trough of disillusionment” means that “interest [in the technology] wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters,” as explained on Gartner’s website.

Mike Walker, research vice president at Gartner, said in a news release that “digitalized ecosystem technologies are making their way to the Hype Cycle fast,” adding:

“Blockchain and [internet of things] platforms have crossed the peak by now, and we believe that they will reach maturity in the next five to 10 years, with digital twins and knowledge graphs on their heels.”

The “shift from compartmentalized technical infrastructure to ecosystem-enabling platforms,” as written in the news release, is building the fundamentals for unique business models as the technology stabilizes in the future.

In addition to blockchain technology, which is part of the “digitalized ecosystems,” four other distinct emerging technology trends that are listed on the hype cycle are “democratized AI,” “do-it-yourself biohacking,” “transparently immersive experiences” and “ubiquitous infrastructure,” according to the release.

The Hype Cycle for Emerging Technologies report is the longest-running annual Gartner Hype Cycle, according to Gartner’s website, and it serves to provide a cross-industry perspective on the technologies and trends.

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Majority of Businesses Have No Plans for Blockchain, Gartner Finds

A new survey from research and advisory firm Gartner suggests that organizations are largely apathetic toward blockchain integration.

According to the results of the research, which queried chief information officers (CIOs) about their companies’ attitudes towards the technology, only 1 percent of CIOs indicated any kind of blockchain adoption within their organizations. Furthermore, just 8 percent said they were in short-term planning of experimentation with blockchain.

However, most notable may be the fact that 77 percent of CIOs surveyed said that they are not interested nor do they have plans to develop and deploy the technology.

According to Gartner VP David Furlonger the survey provides evidence on the “massively hyped state of blockchain adoption and deployment.”

Furlonger added,

“It is critical to understand what blockchain is and what it is capable of today, compared to how it will transform companies, industries and society tomorrow.”

CIOs are more careful in approaching towards implementing blockchain tech. Twenty-three percent of CIO’s, among 293 that are in short-term planning, sees blockchain demanding for new skills to implement, while 18 percent said that blockchain skills are “difficult to find,” a release states. Rest believed that there should be a change in the structure of IT department for better blockchain implementation.

Furlonger further said that organizations could face significant problems of failed innovation, wasted investment, or rejection of a technology, when they rush into blockchain deployments. Blockchain requires understanding of fundamentals of its process, security law, value exchange, decentralized governance, he said.

He mentioned that there is a need for CIO’s to not just recruit qualified engineers, but also to finding enough to see growth in resources as blockchain developments grow. “Qualified engineers may be cautious due to the historically libertarian and maverick nature of the blockchain developer community,” he added.

Furlonger concluded,

“While many industries indicate an initial interest in blockchain initiatives, it remains to be seen whether they will accept decentralized, distributed, tokenized networks, or stall as they try to introduce blockchain into legacy value streams and systems.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.