Blockchain

Is Blockchain Interest Really Low?

Gartner’s 2018 CIO survey had some pretty damning information when it came to blockchain technology. According to the survey, CIO’s in general have very little to no interest in blockchain technology. The media naturally noticed this and reported it as a wet blanket being thrown on the blockchain hype. Something about this though did not seem to jive – why would CIO’s be so indifferent about blockchain technology?  The answer stems from who benefits from blockchain technology. Before analyzing the answer, it’s crucial to understand what problem blockchain technology is trying to solve.

Blockchain technology at its heart is about establishing “trustless” relationships between two untrusted parties. In more traditional models, trust between two untrusted entities depends on a trusted third party. Consider eBay for a moment. eBay enables two untrusted parties, namely a buyer and seller, to do business because both the parties trust eBay to broker the transaction between the two parties. In this case, eBay is the trusted third party. Blockchains on the other hand eliminate the need for the third party because the technology itself provides a minimal amount of trust between the parties.

These two parties though do not have to be individuals, rather they can be businesses, governments, and individuals alike. Here are four kinds of relationships that are likely to benefit from blockchains:

  • G2C relationships Governments all over the world have launched blockchain initiatives because of the potential applications in government to citizen relationships. Everything from voting to land management applications have been proposed. Recording these kinds of transactions on a blockchain enhances trust by making transactions verifiable and tamper resistant, thereby increasing the transparency and trust between a government and its citizens.
  • B2B relationships – Business-to-business relationships are likely to be one of the biggest consumers of blockchain technology and purpose-built blockchains are already being built for industry some verticals. The verticals themselves create consortiums to create the blockchains, then the businesses use the consortium managed the blockchains to conduct business. B2B relationships by way of consortium blockchains are emerging in healthcare, banking, real estate, and a myriad of other industries.
  • B2C relationships – Business to consumer relationships are likely to be another kind of relationship that will have many applications to improve consumer confidence in a business. One such application is supply chain management wherein a company can use a blockchain to track from sourcing to sale where materials and components come from and where they go. They can relay this information to consumers so consumers can make informed purchases as well as be more aware of issues if they arise in products.
  • C2C relationships – Consumer-to-consumer relationships are where blockchains got started in the form of cryptocurrencies. (Cryptocurrencies themselves are just an application of blockchains.) Blockchains in this space enable consumers to do business without the need of a middle man or trusted third party.

Now, back to the CIO. CIO stands for “Chief Information Officer” which is a nebulous term in many regards. Broadly defined though, a CIO is the most senior executive in an enterprise responsible for the traditional information technology and computer systems that support enterprise goals. Note the focus here: enterprise. The attention of a CIO is inwardly focused, so it’s not surprising that such individuals would not be thinking about blockchain technology given that blockchain technology is more outwardly focused for facilitating the exchange of information between organizations. CIO’s have what they need to do their job already, and blockchains don’t necessarily bring anything to the table that will improve upon what CIO’s already use.

The four aforementioned relations are outwardly focused relationships, not inward relationships, so these relationships in general lie outside of the purview of a CIO, rather they lie within the purview of the CTO – the Chief Technology Officer. The role of a CTO is typically more customer (that is, outwardly) focused in that he or she is responsible for providing technology solutions for consumption outside of an organization, and this is where blockchain technology really shines.

While Gartner’s findings painted a rather dim picture concerning interest in blockchain technology, Deloitte conducted another survey of executives in general and the results were somewhat different: they found that blockchain technology was a top priority. The difference between the Deloitte survey and the Gartner survey has to do with the reporting individuals. Deloitte included executives that were not strictly internally-focused CIO’s like Gartner did, rather their executive survey was broader. Deloitte’s findings however don’t paint an all-in picture for blockchain technology at this point. There is still a lot of confusion about blockchain technology, how it works, and how it can be applied.

The takeaway then from this is that the interest for the technology can be found in those who are interested in reaching out to new customers and maintaining relationships with existing customers. Likewise, it falls to proponents of blockchain technology to educate and advocate for blockchain technology and its many uses.

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