A healthy dose of skepticism is well, healthy. As for The Economist, their opinion is pretty much in lockstep with much of the world’s biggest industries that have been predicted to be ripe for adoption of blockchain technology. With specific mention of the financial and banking industry, the editorial goes into why blockchain technology may be a slowly adopted innovation.
In the editorial, the author points to the hyper-competitive nature of financial firms and banks as being a hindrance to the proliferation of blockchain technology. Due to the lack of cooperation between the world’s biggest banks, having blockchain technology embraced by one big bank, while it might make them appear innovative and cool, won’t make a large impact on the industry as a whole until many different banks all start working together to change very long-standing practices of moving, managing and making money.
The piece also aims skepticism at the scalability of blockchain. In what appears to be an allusion to their opinion about Bitcoin’s current scaling issues associated with the block-size debate and delayed transaction times, the piece talks about how this would be an unacceptable liability for big industry players to undertake. The piece also displays some doubt in the current security of blockchain technology based on the lack of private blockchains being developed compared to public shared ledgers.
It’s clear that the piece does save a glimmer of hope in the development and applications of blockchain technology just not within the next decade or so. They believe that even though the finance industry stands to benefit greatly from the technology, some other industry will likely pave the path and prove its viability first. It makes sense from a point of view that financial institutions are typically highly reactive and risk-averse. Companies like
It makes sense from a point of view that financial institutions are typically highly reactive and risk-averse.
Companies like Deloitte have predicted that other industries such as insurance and entertainment will also adopt blockchain technology to a great extent and they may be the ones to make the best use of it first.
The Economist has shown interest in the core fundamental purpose of a trustless ledger before, however, most of the skepticism that can be found in this piece likely stems from the lack of enterprise-ready solutions based on blockchain technology.
With their mentioning the R3 consortium as well at IBM’s “Open Ledger Project,” it’s clear that much interest, at least from this editorial’s perspective, lies in established big businesses that have a long working history with financial institutions being able to develop, master and offer reassurance of stability in a private blockchain technology standard.
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