The blockchain-based IDBox is tested in a village in Papua New Guinea. /Photo courtesy of www.apec.org
Blockchain will change the world. This is what the tech sector has been telling us for several years now, with billions of dollars invested into a concept that many in the world of business are still struggling to get their heads around.
Blockchain is one of the most overhyped technologies, ever. This too is an increasingly popular mantra for investors and economists, frustrated at a lack of visible progress in its development.
So, who should we believe?
If you look at the countless deals and cooperation agreements signed on blockchain research and development, it's clearly a big deal.
Alibaba, JD.com, Baidu, Tencent – in short, all of China's top tech firms – have announced supply chain security deals, published white papers and formed security alliances, all based on the concept of blockchain.
Once you look beyond the complex encryption technology that powers blockchain, it's a strong concept, particularly in a digital future that will be dominated by data.
The promise of end-to-end security, unalterable data, smart contracts and instant transactions and transfers of information will be in demand across all sectors in the global economy.
From protecting and guaranteeing supply chains to transforming financial markets, cross-border transactions and ensuring data security, blockchain sounds like the missing piece in the next step of mankind's future development.
Growing impatience and frustration
However, in a modern economy driven by speed and quarterly results, blockchain has not been implemented overnight.
This is causing frustration.
“Blockchain is one of the most overhyped technologies ever,” renowned economist Nouriel Roubini told Project Syndicate in March this year, claiming the technology was inefficient and unlikely to replace “middleman” financial services.
A study by global research firm Gartner in 2017 found that by 2022, only 10 percent of companies worldwide will have seen “radical transformation” brought about by blockchain, suggesting the technology will still not have taken over the globe in the next five years.
Over 80 percent of businesses looking to save money through blockchain technology will fail to do so by 2020, according to the report, which said the tech was a long-term concept rather than a quick one-size-fits-all solution.
Unlike other tech buzzwords like artificial intelligence, VR, AR and Internet of Things, blockchain is an invisible concept – its development is hard to visualize and understand.
Any fall in enthusiasm for blockchain may have coincided with the sharp drop in Bitcoin and other cryptocurrencies, with a value of more than 400 billion US dollars lost since January.
Yet Bitcoin and blockchain are not the same thing – Bitcoin is just one type of tree in an entire digital ecosystem, which has plenty more room to grow.
APEC looks ahead to a 'digital future'
This year's Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting has the theme of "digital future."
It will take place in Port Moresby, capital of Papua New Guinea, a country that remains largely isolated from the rest of the world in terms of trade and access to capital markets.
This year, the country's central bank has been trialing blockchain technology in rural, remote parts of the country where people have no banks, no Internet access, and no identification documents.
The IDBox, according to APEC's official website, allows villagers in Papua New Guinea to upload their fingerprints and SIM card numbers to the blockchain. This creates a digital ID for residents, allowing them to access mobile payment platforms and other services such as e-commerce.
“Our goal for the people of Papua New Guinea is financial inclusion,” said Loi Martin Bakani, governor of the Bank of Papua New Guinea.
“We can leapfrog mature economies with this technology,” said Bakani, voicing optimism for a country that remains largely rural (82 percent of people live outside urban areas) and cut-off from basic financial services – only 15 percent of people there have bank accounts.
It will take time for Papua New Guinea to develop, in the same way that it will take time for blockchain and other technologies to develop and reach their full potential.
Innovation requires faith, patience and cooperation. Bakani summed up the situation for both his country and blockchain itself in one short, simple sentence.
“We have a lot more to learn, but we also don't want to be left behind.”
