Blockchain is a moneymaker – in the short-term, at least, as hype continues to draw investors. The industry, which saw a $411.5 million valuation last year according to analysts, could reach a $7.6 billion market valuation by 2022.
But blockchain’s ability to disrupt everything from cross-border payments to human rights management is far from a sure thing – and this week, the doubters made their voices heard. PYMNTS takes a look at some of the latest research and commentary that challenges market confidence in distributed ledger technology.
Warren Buffett’s Hard Swipe
Warren Buffett has not been shy about his bitcoin skepticism. Earlier this year, the billionaire investor told CNBC that cryptocurrencies will “come to a bad ending,” vowing to “never have a position in them.”
Since, it seems, Buffett’s position in cryptocurrencies has soured even further.
“[Bitcoin] itself is creating nothing,” he told CNBC this week. “When you’re buying non-productive assets, all you’re counting on is the next person is going to pay you more because they’re even more excited about another person coming along.”
Cryptocurrency, he concluded, is “probably rat poison squared.”
Parliament Said Blockchain Is No More Than ‘Pixie Dust’
Buffett’s remarks sparked immediate disagreement from some, and it’s worth noting that the investor did not include blockchain in his cryptocurrency shutdown.
Neither did Bill Harris, former Intuit CEO and founding PayPal and Personal Capital CEO, when he declared that “bitcoin is a scam” in an article for Recode last week.
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., found himself regretting earlier criticism of bitcoin when he spoke with Fox Business this week, according to Bloomberg. He told reporters that he wishes he had not declared bitcoin a “fraud … worse than tulip bulbs” last year.
“The blockchain is real,” he said this week. “You can have crypto yen and dollars and stuff like that.”
But blockchain itself landed harsh criticism this week from another source.
Martin Walker, director of the management think tank Center for Evidence-Based Management, offered testimony before the U.K. Parliament’s Treasury Committee, where he compared blockchain to “pixie dust” and “magic wands.”
“There’s a big problem in the blockchain world with confusing ‘could’ for ‘is,'” Walker stated, adding that “in terms of demonstrable benefits” there is “little to nothing” that blockchain has to show.
“All that it takes to make a credible idea into a fad is people just switch off their brains and stop thinking,” he continued, according to Business Insider reports. “Over 20 years in and around the banking industry – blockchain is a fad, but I have seen many fads in my career.”
“If 10 percent of what I’ve heard in my career had come true, we would have these amazing banks that run for £1 a week,” Walker continued.
According to Walker, most developers have abandoned the original principles of blockchain that led to its creation in the first place. He added that banks risk “getting some of the basics right” because they are distracted by blockchain.
Gartner Finds Proof CIOs Aren’t Interested
Amid this commentary, new research emerged this week that offers evidence that chief innovation officers simply aren’t interested in blockchain. Data from Gartner’s 2018 CIO Survey found most companies do not have plans to adopt blockchain technology, with just 1 percent having already implemented the tool into their organization. Only 8 percent said they are in the short-term planning or experimentation phase with blockchain.
Instead, more than three-quarters of CIOs surveyed said they have no plans whatsoever to develop or use the tool. Forty-three percent said blockchain is on their radar, at least, but still have no solid roadmap to actually use it.