The seven mistakes CIOs can make with blockchain – and how to overcome them
Gartner appears to really have it in for blockchain – or at least, wants to make sure organisations don’t dive in head first and make a serious mistake.
The analyst firm has put together a list of seven mistakes to avoid in blockchain projects as part of its latest research, including misunderstanding use cases, wrongly assuming key standards, and ignoring governance issues.
The findings, which appear in the ‘Common Mistakes to Avoid in Enterprise Blockchain Projects’ paper (client access required), are unveiled alongside an underwhelming response from the C-suite. According to Gartner only 11% of CIOs polled had deployed, or are in short-term planning, with blockchain projects.
As per the analyst’s Hype Cycle for technologies, blockchain is currently right in the middle of the much-derided trough of disillusionment. Gartner argues that there will be no single platform achieving dominance within five years – an argument similar to that made by Hyperledger’s Brian Behlendorf in this publication earlier this week.
Gartner outlines the septet of mistakes CIOs can make with blockchain technologies as:
Misunderstanding or misusing blockchain technology
The majority of projects so far, Gartner argues, are around recording data on blockchain platforms via decentralised ledgers. Areas such as tokenisation and smart contracts are seemingly anathema. “It is fine to start with DLT, but the priority for CIOs should be to clarify the use cases for blockchain as a whole and move into projects that also utilise other blockchain components,” said Adrian Leow, senior research director at Gartner.
Assuming the technology is ready for production use
This is a bugbear of which regular readers of this publication will be aware; the immaturity of current blockchain platforms for enterprise use cases. Speaking to sister publication The Block at the Blockchain Expo Global event in April, Douglas Horn, architect at Telos, argued real-world applications for blockchain need ‘amazing speed and capacity.’ Telos, built on the EOSIO architecture, offers much greater performance than Ethereum, but there is still a long way to go.
Confusing a protocol with a business solution
Once you’ve picked your solution and integrated it initially, it still doesn’t mean it’s all systems go. User interface, business logic, and interoperability mechanisms need to be considered. “There is the implicit assumption that the foundation-level technology is not far removed from a complete application solution. This is not the case,” said Leow. “It helps to view blockchain as a protocol to perform a certain task within a full application.”
Viewing blockchain purely as a database or storage mechanism
In various cases, the question has to be asked over whether a blockchain is truly necessary for a project, rather than just a database. Gartner notes that blockchains do not have full database management capabilities – supporting ‘create’ and ‘read’ but not ‘update’ and ‘delete’.
Assuming that interoperability standards exist
This point is again noted to how nascent blockchain technologies are in the enterprise; do not blindly assume vendor promises on interoperability. “Never select a blockchain platform with the expectation that it will interoperate with next year’s technology from a different vendor,” said Leow.
Assuming smart contract technology is a solved problem
Gartner describes smart contracts as ‘perhaps the most powerful aspect of blockchain-enabling technologies’; allowing the performance of credible transactions without third parties ‘adds dynamic behaviour to transactions.’ Yet the analyst firm warns the technology will still undergo significant changes in the coming years.
Ignoring governance issues
This is another regular concern; according to a recent post from IBM, governance was cited as vital. Part of this process is ensuring all stakeholders are onside – a high-wire balancing act. Leow argued governance is too focused on the technical right now, rather than human behaviours. “CIOs must be aware of the risk that blockchain governance issues might pose for the success of their project,” he said. “Larger organisations should think about joining or forming consortia to help define governance models for the public blockchain.”
Last month, the analyst firm warned that by 2023, up to 90% of blockchain initiatives may suffer from ‘fatigue’ due to a lack of strong use cases. A year before, Gartner’s CIO poll found a third (34%) had no interest whatsoever in the technology.
Interested in hearing more in person? Find out more at the Blockchain Expo World Series, Global, Europe and North America.
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