Every day the world hears about another blockchain project in the works or another distributed ledger technology consortium forming. What it doesn’t hear, though, is that most of those initiatives will go defunct only a few months after launching. Just last week, Deloitte found that in 2016 alone, nearly 27,000 new blockchain projects surfaced on the market. Today, only 8 percent of them remain active.
“The stark reality of open-source projects is that most are abandoned or do not achieve meaningful scale. Unfortunately, blockchain is not immune to this reality,” Deloitte concluded in its analysis.
Despite that reality, blockchain projects continue to roll in, and in this week’s Blockchain Tracker, PYMNTS takes a look at some of the largest names in tech marching forward with their faith in blockchain and its potential to disrupt enterprise processes.
According to reports in Cointelegraph this week, payments technology firm Mastercard filed a patent related to real-time payments using blockchain technology. Reports said the filing, dated Nov. 9 with the U.S. Patent and Trademark Office, shows Mastercard’s plans to deploy distributed ledger technology to develop a platform on which credit card transactions can be completed in real-time, rather than through the current system, in which payees have to wait several days before those transactions are verified and land in their accounts.
“There is a need for a technical solution where a payment transaction can be guaranteed in a manner that is readily verifiable by an acquiring financial institution and/or merchant,” Mastercard stated in its filing. “By enabling the use of the guarantee with multiple payment instruments and transaction types, the guarantee may be used in more situations with a higher convenience to both consumers and merchants, which may result in merchants receiving instantaneous, guaranteed payment while maintaining a high level of consumer convenience.”
Together, SAP and EY said they are pushing for corporate adoption of blockchain in the area of supply chain management, a common target of open-source blockchain projects. With their collaboration, the companies plan to integrate blockchain-based mobile apps and services onto the SAP Leonardo platform, which itself is designed to enable corporates and developers to take emerging technologies like blockchain, machine learning, IoT and more and to create their own prototypes that function on the SAP Cloud platform.
Their partnership deploys EY’s Ops Chain supply chain management solution built on distributed ledger technology. Ops Chain will be integrated into SAP Leonardo and allow corporate customers to access the solution that manages digital contracts, logistics information, inventory data, invoicing and payments.
In a statement, EY Global Innovation Leader, Blockchain Technology, Paul Brody, said, “blockchains are quickly becoming routine tools for business processing that companies can use to manage and take action from the huge amounts of data their systems collect and process.”
“This data is often collected across a disconnected, fragmented infrastructure,” he added. “EY Ops Chain and SAP Leonardo will help companies quickly develop and deploy blockchain solutions that connect business operations across their systems, on a platform already widely used by companies worldwide.”
Hewlett Packard Enterprise
Months after Hewlett Packard Enterprise (HPE) first announced its interest in blockchain technology, the firm revealed its first product developed within its HPE Mission Critical Blockchain group. The product, dubbed Mission Critical Distributed Ledger Technology, will provide companies with hardware so they can operate their own blockchain platforms through their own corporate partners. HPE said its distributed ledger technology (DLT) solution is faster and more secure than bitcoin or Ethereum blockchains.
The solution, which will be available to HPE customers early next year, is a relatively vague offering that relies on corporations’ own interest and commitment to using blockchain technology. Described as a Blockchain-as-a-Service offering, the tool can be used across a range of use cases, HPE said in its recent announcement, though it didn’t specify particular applications of the tool in its press release.
More Support for Blockchain in Trade
Like EY’s Ops Chain, other technology firms maintain faith that blockchain will disrupt global trade and supply chain management processes. This week, blockchain FinTech BlockEx announced a partnership with OpenText to use distributed ledger technology to streamline supply chain finance.
OpenText, a supply chain operator that has more than 600,000 companies in its business network, will work with BlockEx to develop a blockchain-based supply chain finance solution for that network. The companies said they aim to produce a digital marketplace that facilitates firms’ access to supply chain finance that can also manage settlement and post-trade processes.
Some governments are beginning to explore blockchain in the context of global trade, too.
This week, Hong Kong Secretary for Financial Services and the Treasury, James Henry Lau, said blockchain could offer “great benefits” in global trade and trade finance for the markets that participate in China’s Belt and Road Initiative, an effort launched in 2013 to streamline trade across the Silk Road Economic Belt. According to news from Caixin Global, vocal support for blockchain in global trade follows Hong Kong’s previous efforts to deploy DLT in the use case of digital contracts and anti-fraud efforts.
But even as more technology giants forge ahead with their blockchain plans for 2018 and beyond, scrutiny over the technology and the projects that rely on it is increasing.
Following Deloitte’s report, separate analysis by Forrester, published late last week, similarly found that about 80 percent of blockchain projects fail to deliver their intended results.
“Without a solid foundation, blockchain cannot be successfully built upon for enterprise tools,” wrote CIO Dive in its analysis of Forrester’s report. “Yet only about one-third of current blockchain proof of concepts provide enough basis for future development and innovation on the platform.”
In the context of growing realizations of lackluster blockchain initiatives, Reality Shares and Nasdaq announced this week they’re launching the Reality Shares Nasdaq Blockchain Economy Index, an index to track the performance and development of the conglomerates that implement blockchain-based tools. According to Reality Shares CEO Eric Ervin, the companies launched the new Index with the belief that organizations using blockchain will be the innovators of their perspective fields.
“As these new applications are deployed, we believe these companies will most likely become disruptors in their industries, with potential to profit at the expense of laggard companies that do not deploy blockchain applications,” he stated.
But according to analysis from Deloitte and Forrester, many organizations could see a bit of failure of their blockchain initiatives before finding the right fit.