Is Blockchain Overrated?

Is blockchain overrated? By whom? This question can be answered both with a yes and no. The distributed ledger technology (DLT) is overrated by those who overrate it and underrated by those who underrate it – it’s as simple as that. Blockchain is a relatively new technology, which is why many entities tend to overestimate its potential or make premature conclusions about its global impact. However, there are other parties that still underestimate it, though you’ll hardly read about them in today’s crypto/blockchain news sites.

The healthiest approach to blockchain is to accept it the way it is, with its pros and cons, and reap as many benefits as you can. Many companies stick to this approach – they are implementing the technology without too much fuss. Generally, these are big companies that integrate blockchain solutions with existent systems.

Recently, JPMorgan – the largest bank in the US by total assets – published a report on blockchain and cryptocurrencies. The bank’s analysts said that the value of cryptocurrencies like Bitcoin was unproven. Well, such a verdict was expectable considering the opinion of CEO Jamie Dimon about Bitcoin. At the end of 2017, he said that Bitcoin was a fraud and that he would fire any JPMorgan trader who gets caught trading crypto.

But what can JPMorgan analysts say about blockchain, especially when the bank itself is proposing DLT solutions through its Quorum platform? Well, it seems that the banking giant is not enthusiastic about the technology either. The research document reads that there has been too much hype around blockchain and it won’t cause significant changes in the next three to five years. Thus, if you want to find an objective answer to your question, you can also consider the position of JPMorgan – yes, blockchain is overrated, but it doesn’t mean it doesn’t work or that it’s not helpful in many ways. The hype effect is visible because many individuals and organizations are manipulating whole communities in order to attract funds or increase brand awareness. Think about how Riot Blockchain rebranded from a biotech firm with a different former name and how its share price suddenly jumped. There were many cases like this one. A similar phenomenon happened during the adoption of the Internet, with NASDAQ recording huge gains.

While there was much hype around the Internet before 2000, it doesn’t mean the technology hasn’t been revolutionary – it is indeed, but the real impact comes at the right time.

JPMorgan recognizes the advantages of blockchain to a certain degree:

“Blockchain is unlikely to re-invent the global payments system, but instead can provide marginal improvements to various parts of the process.”

“The most meaningful impact will probably be three to five years away and mostly on trade finance,” Joyce Chang, the bank’s chair of global research, said in an interview on Monday, according to Bloomberg.

https://www.bloomberg.com/news/articles/2019-01-29/jpmorgan-says-blockchain-is-making-progress-outside-of-crypto

When it comes to the challenges and issues that blockchain has to overcome, Chang mentioned four of them – integration, scalability, regulation, and cost-efficiency.

Nevertheless, many important banks and financial companies besides JPMorgan are adopting blockchain and trying to get the best of it.

https://www.businessinsider.com/blockchain-technology-banking-finance-2017-9
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