Does Blockchain really have potential?

“Our belief…is that blockchain is a fundamental part of the new operating system for the planet.”

says Barclays. Will Blockchain impact every area and business or is it a solution to problems which the UK aren’t currently facing? 

Blockchain has huge potential, but it seems no one knows what for yet. There are positive legal applications, security applications, insurance applications as examples, but few have seemed to apply the technology in a live environment.

The Blockchain Potential

Blockchain potential has been heavily reported in terms of cryptocurrency. However, it seems Blockchain is yet to break free of its financial shackles. Other emerging technologies such as Artificial Intelligence, Internet of Things and Robotic Process Automation have many live use cases. They highlight the digital age and a transformation which could be compared to the Industrial Revolution. Serviceteam IT’s Beyond the Cloud: UK Technology Research 2018 revealed that these emerging technologies are widely used across all sectors from education to finance, and government to professional services. 35% of respondents were actively using AI or have a planned deployment and 28% of respondents were actively using or deploying IoT.  

However, Blockchain did not have a high adoption rate. None of the respondents are actively using Blockchain and only 3% of respondents were planning Blockchain potential deployment. 

A global Gartner survey similarly found only 1% of CIOs were running Blockchain projects and 8% were planning to implement the technology or were just experimenting with a longer-term interest. 

Both surveys are suggesting that global as well as UK Blockchain adoption is only an tech investor’s dream. Is there a reason that the UK are not ahead globally, and if it were not for an uncertain EU-less future, would we be leading Blockchain innovation?

Blockchain Adoption in the UK

The UK has faced a multitude of challenges over the past few years. In Serviceteam IT’s 2017 research 62% of respondents mentioned GDPR as the greatest impact on their business in the next 36 months. Introduced on 25th May of this year, GDPR had businesses of all sizes shaken up; whether they needed to be or not. It seems most IT department’s attention was diverted into becoming completely compliant and not fined 4% of the business’ annual turnover overnight. In the 2018 survey, two different concerns seemed to dominate; one was skill shortages and the other was yes, you guessed it, BREXIT. 24% of respondents in 2018 listed a skill shortage as the main challenge to their business in the next 36 months. It is unsurprising also that 70% of respondents were unsure or do not have the skills to deal with emerging technologies, such as Blockchain. The Guardian mentioned that over one million skilled workers will leave the UK after Britain leave the European Union. In turn, it is likely this will eventually lead to a decline in the educators and the educated in technology, which can only have a negative knock on effect to UK business Blockchain adoption.

This leads to the next challenge, the notorious Brexit. Brexit is a constant worry for UK organisations which is currently being heightened by the divided government and the apparent brick wall between the British and EU negotiators. Not to mention the criminal allegations of the Vote Leave campaign. Considering Serviceteam IT found only 20% of UK businesses have a contingency plan outlining procedures for the various outcomes of Brexit negotiations, the main challenge to UK business, it is unsurprising Blockchain adoption is so low. It seems that UK businesses must always concentrate on something else, rather than emerging technologies. This begs the question: had UK businesses been able to concentrate on Blockchain research, would we be a leader in global technology? Considering UK Blockchain adoption is similar, if not ahead of global adoption, this question cannot be helped. 

This also is assuming that Blockchain adoption positive for businesses. An example of Blockchain being deployed is a smart ticketing system: The Aventus Protocol. Two Imperial College London graduates have used cryptocurrency to eliminate fraud by quickly identifying fake tickets and ridiculously expensive re-sale prices. The technology works by having a unique ticket identity linked to its owner. Professors and veterans across the country believe this form of Blockchain has a lot of potential. https://www.theguardian.com/uk-news/2018/may/06/two-friends-invent-smart-ticket-tech-outwit-touts  

Until recently, reports have commented that businesses are starting to swap Blockchain exploration for deployment.  Serviceteam IT could report that 25% of respondents in the UK have a longer-term interest in Blockchain. This seems like an impressive percentage at first glance; however, it counters the reports that UK business is moving away from Blockchain exploration. It seems the tourists do not want to come back from their holiday to face reality.

This blog is not trying to say that other countries haven’t faced challenges which have affected its emerging technology adoption. However, other countries may be incentivised to deploy these technologies if they struggle with location, such as New Zealand. Countries further from each other trade less (for obvious reasons), technology has bridged this gap, and Blockchain could help even more so, with smart contracts as an example.  Yet, the UK has a great geographical location and has been a member of the largest free trade organisation in the world. Although this may seem like the perfect opportunity to invest in innovative tech, it has had quite the opposite effect. The UK has become too comfortable with its surroundings. Some may even go as far to say they have taken advantage of their location and trade deals.

Blockchain Risks

This is starting to sound like a moan and a groan but unfortunately Britain’s uncertain future will not help Blockchain adoption either. With Brexit, skill shortages and cyber-security becoming increasingly sophisticated, it seems British businesses have more on their plate than being a global technological leader.

With this in mind, Blockchain may be able to help with Brexit, a skill shortage, cyber-security and GDPR. In terms of Blockchain and Brexit,

“we’ve got to take some risks. We have the opportunity to really make a difference in a way that I don’t think Europe post-Brexit is going to be able to do.”

said the senior legislator in the EU’s Economic and Monetary Committee Kay Swinburne.  

In addressing a skill shortage, Blockchain – if it breaks out of cryptocurrency – has many practical applications. One includes smart contracts where a deal is signed between two primary parties without the need for an intermediary. If there is a reduction in the number of skilled workers with this level of qualification and knowledge to form a contract, this may be necessary to continue trade deals with the EU to be able to do so through Blockchain. This has been reported as a potential solution to the Irish Border issue, https://www.telegraph.co.uk/politics/2018/02/13/blockchain-could-solve-post-brexit-irish-border-question/

In terms of cyber-security, the company REMME have used Blockchain so businesses can authenticate devices and their users without a password. By removing the human interaction with authentication, this prevents the devices from becoming the location of a cyber-security attack.  

Blockchain could also help with GDPR compliance. As it is a digital collection of data, Blockchain could ensure that all users information is automatically secure.  

Overall, maybe the UK is focusing on technology from 10 years ago rather than current innovation which will bring us back globally. However, there are external factors which have prevented the UK from further research in these technologies. In January of this year, the government through Innovation UK announced that they would invest £19 million in Blockchain adoption. Let’s hope that this will mitigate challenges in Britain’s uncertain future.