CIO tips on blockchain technology from Forrester analyst Martha Bennett

Forrester analyst Martha Bennett
Forrester analyst Martha Bennett has revealed a report on blockchain technology: A CIO’s guide to the six most common myths.

Spending on blockchain services will be growing from $1.8 billion in 2018 to $8.1 billion in 2021, achieving a compound annual growth rate (CAGR) of 80 percent, according to IT analyst firm IDC.

The potential to reduce cost and increase efficiency is one of the key attractions for wanting to move a process to a blockchain-based network. In many use cases, this implies doing away with an existing intermediary.

Many blockchain enthusiasts cite their “trustless” operating model as a key reason for using the technology to replace existing ways of conducting transactions between individuals and enterprises — particularly those involving trusted third parties.

Many of the use cases put forward for blockchain-based networks promise to prevent fraud and ensure the provenance of goods, both in the digital and the physical world. No technology, blockchain or otherwise, can prevent fraud on its own. The trackability inherent in a blockchain-based network may act as a deterrent in some cases.

Making transactions and processes more transparent indisputably is one of the key benefits of blockchain-based networks. Addressing the need for confidentiality is the biggest technical challenge developers need to resolve.

The principle of smart contracts brings a lot of value to blockchain-based networks, and for many, smart contract capabilities are a key reason for embarking upon a blockchain journey. But you need to understand them for what they are and the context in which they operate.

The rate of innovation in the blockchain ecosystem is high, and there’s a tremendous amount of work going on to address key issues such as the need for scale and supporting confidentiality. Blockchain-based networks can support new business and trust models, but we need to design them first.

IDC said blockchain begins to find its way into corporate strategies and business processes and business and IT consulting, development, platform, outsourcing, and educational services will be needed.

IDC expects to see dramatic growth in the blockchain developer marketplace over the next several years. By 2021, the number of consultants and developers in blockchain services will have grown 10-fold from current estimates.

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