Why 2017 is Crucial for Banks to Prove Blockchain Tech’s Worth
Research organizations outsold Blockchain technology to the general public. 2017 is an important year for banks and financial institutions which are pressured by investors to prove the worth of Blockchain technology.
Prominent research organizations such as the World Economic Forum (WEF) have made ambitious predictions over the past year and outsold Blockchain technology to the general public.
The WEC previously stated that 10 percent of the world’s GDP will be overseen by Blockchain technology which is currently being tested by leading banks and financial institutions worldwide. That is trillions of dollars managed by Blockchain technology.
However, many argue that the Blockchain industry is exceedingly overhyped. So-called experts or analysts within the field of Blockchain fail to understand the technical aspects of the technology. Some individuals including Perianne Boring, a former Congressional assistant and journalist for RT and Forbes, were harshly criticized by their lack of knowledge in Blockchain technology and what the technology is actually capable of doing.
These hyperbolized predictions on the exponential growth of the Blockchain market don’t necessarily reflect the development and commercialization of the technology. Rather, it is purely based on the amount of investment being allocated to Blockchain startups and companies focusing on the development of the technology.
Banks and financial institutions have begun to actively develop Blockchain technology since early 2015. Greenwich Associates amongst other research firms state that over $1 bln is being spent on the development of Blockchain every year. By that rate, already, over $2 bln has been spent on the development of Blockchain technology.
Yet, the financial industry nor the Blockchain market are yet to see the deployment of properly designed Blockchain networks. Banks and financial institutions have failed to present even one single working commercialized Blockchain platform used by actual consumers and users.
2017 is an important year for banks and financial institutions. They are pressured by investors to prove the worth of Blockchain technology and that the billions of dollars they have spent are worthwhile. Based on the current roadmap and vision of development presented by banks, it seems as if commercializing Blockchain will be difficult within the next 12 months.
Banks have yet to figure out security and regulatory aspects of Blockchain technology. To prioritize security, a Blockchain platform must be decentralized and free of central authorities or administrators, purely ran by peers in a peer-to-peer network. However, such a platform is not viable in a heavily regulated industry in finance.
Ethereum, an open-source, public, Blockchain-based distributed computing platform was introduced in July of 2015. Multi-billion dollar banks have been attempting to release a Blockchain network since early 2015. While open-source projects like Ethereum led by a team of developers funded with tens of millions of dollars managed to roll out a billion dollar Blockchain software, banks which have spent over two billion dollars are yet to release even a working prototype of their Blockchain platforms.