Blockchain Investing Are Mostly Speculative As of Now

Most of the blockchain
investments in 2019 are seen to be predominantly speculative, according Gary
Gensler, MIT Sloan Professor and senior advisor to MIT Digital Currency
Initiative. The use of blockchain for day-to-day business is extremely thing,
accoridng to Michael Casey, senior adivisor to the Digital Currency Initiative.
Blockchain is a distributed
ledge technology that creates an unchangeable record of transactions,
facilitating interaction between participants without the need for
intermediaries such as banks. The technology is complex and not conclusively
defined — some so-called blockchain applications are simply traditional
distributed ledgers, lacking blockchain’s hallmark features of anonymity and
immutability, experts have pointed out. What’s more, figuring out how and when
to apply blockchain is challenging, and companies are struggling with the
business model.
Although the initial enthusiasm
was about finance, supply chains are more likely to be the first real,
practical use case for the technology, said Irving Wladawsky-Berger, a visiting
lecturer at the MIT Sloan School of Management.
“Financial systems are among
the most ungodly complicated systems you can imagine,” he said, making the
application of a complex technology like blockchain extra difficult. Supply
chain applications can be simpler, and the potential value more
straightforward.
Wladawsky-Berger said he can
explain a supply chain application in the time it takes to deliver an elevator
pitch, albeit a longish one (30 floors, he said). “If you are going to develop
something complicated, being able to describe it simply is very important,” he
said. “I think that’s a major part of why supply chain is the killer app of
blockchain.”
As a shared digital ledger that
creates an immutable record of transactions, blockchain is ideal for tracking
the provenance of goods. It enables trustworthy shared information among
suppliers that may not trust each other. “One of the best ways to think about
blockchain is in the context of a supply chain,” said Casey. It enables a group
of independent entities, which have their own interests and information to
protect, to share a common platform that holds information of common interest.
It helps to have a dominant
company driving the use of blockchain, as is the case in two supply chain
applications that may be close to going into production. Walmart has been
running a pilot project with IBM’s Food Trust Solution, a blockchain-enabled
distributed ledger of food system data, to track lettuce from its suppliers to
Walmart shelves.
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