Beyond the buzz, has blockchain found its place in business?

Announced as revolutionary, the blockchain is struggling to convince in business. Too high expectations or irrelevant technology? Attempt to answer.

The blockchain was on everyone’s lips a few months ago. All the companies went there with their project using this technology made of “blocks” and decentralization, mainly known through cryptocurrencies, but whose potential was announced as exceptional. Between fashion, buzzword and real interest in companies, it was sometimes difficult to sort out. Today, many hastily launched projects have failed and apart from a few use cases, adoption seems slow. Worse, it is the relevance of using this technology in business that is regularly called into question. 13 years after the birth of the blockchain and its status as a revolutionary technology, has it found its place in companies?

A little reminder is necessary before going to see where the companies are. Blockchain is a technology that allows store and transmit information securely, transparently and without a central control body. In the financial world, this amounts to removing an intermediary such as banks. We can compare the blockchain to a huge database in which the history of all exchanges between users is stored of the block chain concerned since its creation. A blockchain can be public or private and is used at this stage to transfer and hold assets such as cryptocurrencies, to provide traceability of a product or to execute smart contracts automatically. The most important notion to remember in relation to the blockchain is decentralization. This means that the famous database is not hosted by a single trusted third party, but by some or all of the users of the blockchain, and that each participant can consult it whenever they want.

After the preliminaries, let’s move on to practice. Promising on paper with its notions of decentralization, transparency and inviolability, the blockchain has convinced companies to venture into itand not least, even with us.

You are shopping and you want to know the history of a product before buying it. Where does it come from, has it been processed, has the cold chain been respected? Blockchain technology theoretically makes it possible to list this information in a tamper-proof manner and to make it available to the consumer. A possibility that convinced the Carrefour group to embark on thehas blockchain version traceability. Carrefour has digitized the entire journey of a product, the Carrefour Quality Line pork of yesteryear, and has used blockchain technology to guarantee the reliability of the data. In collaboration with a Belgian start-up, Vinçotte then developed a web application for Carrefour that allows you to read a QR code affixed to the product packaging. All the user has to do is scan it with their smartphone. Launched in France in 2018 in the test phase on Auvergne chicken, the project was resumed in 2019 in Belgium with the aim of extending it to other references.

“It’s not so bad that there are projects that have crashed, it shows the limits and it lowers expectations. I see projects where the blockchain is relevant and others where it is only a buzzword.”

Denys Bornauw

Senior Business Group Leader at Agoria

Two years later, the retail brand says it is satisfied with the initiative even if it does not intend to extend it to thousands of references tomorrow and justifies the choice of the blockchain: “We have very complete with several hundred pages that contain the place, the animal feed and the entire chain that the product followed before arriving in the store.We have condensed this information.The blockchain allows us to guarantee the veracity of the information to the consumer. information that is verified by an external control body. The usefulness for us lies in the credibility that this technology brings to the information given”, we are told at Carrefour, which remains more discreet about the use made of this initiative. by its customers.

A too fast craze

Traceability seems to be one of the aspects of the blockchain where companies find their account. At AB Inbev, we called on SettleMint, a Belgian company specializing in the implementation of blockchain projects, and Fujitsu, for this too. ensure transparency and traceability of the barley supply chain and its production processes, from the consumer to the farm. It works, but let’s face it, it’s more of a gimmick than a paradigm shift. Especially since the examples are not legion.

An attentive observer and player in a sector that is ultimately still very young and taking shape, Harold Kinet, CEO of Be Blockchain and at the initiative of the Walloon Walchain network, recognizes the slow penetration of technology compared to announcement effects who predicted a tidal wave. “There is still a long way to go. There was a bit too rapid a craze at the time. The use cases are coming in drop by drop. It started with everything concerning production chains with big companies like Coca-Cola which uses technology for the traceability of its production, then the luxury sector seized it with, for example, LVMH which uses it to certify and trace some of these articles to avoid counterfeiting. “

“There is a big cognitive barrier. It takes time to integrate into companies, because you first have to train yourself, understand what it’s for in order to try to apply it to your own business.”

Harold Kinett

CEO Be Blockchain

Examples in large companies, there are several. But when the size of the company is reduced, the blockchain does not seem to have convinced many people, nor to have found its place. “There is a big cognitive barrier. It takes time to integrate into companies, because you first have to train, understand what it’s for in order to try to apply it to your own business”, continues Harold Kinet . “Blockchain in business is currently developing mainly through the use of Web3.” Web3 is what is announced as the future of the Internet. It takes over from version 1.0 and 2.0. Its applications and tools are based on blockchain technology which ensures decentralization of power to users and no longer shared between a few large platforms as is currently the case. Anyway, that’s the promise.

In terms of promise, the blockchain has been strong and is struggling to recover from the excessive expectations placed on it. Even though the word has become common, the technology remains young and in search of maturity. “We are still in the education phase”, confirms Denys Bornauw, Senior Business Group Leader at Agoria, the federation of the technology sector. “We have to be able to educate companies not to take the blockchain for a buzzword. We have to see in the different industries, what contribution this technology can make to solving certain problems. It’s not fast enough for transactional example. But if I need to have traceability or security, then yes that can be considered.”

As is often the case with technological revolutions, the announcements are not followed by the effects, or at least not necessarily those expected. Add to that an economic context that is not very favorable to risky investments and you have part of the explanation. “The problem is that it’s still experimental technology. Very few companies can take the risk of testing concepts related to this technology”, according to Denys Bornauw. Because Beyond the financial risk of implementing a blockchain project, there is also the legal risk. The legal framework surrounding the use of the blockchain is still very vague at this stage and represents a major obstacle to mass adoption.

A technology reserved for adults?

The complexity of the technology and therefore its difficulty of understanding by the business world has not helped its popularization. “Companies come to us asking us to use blockchain for such and such a project. And in general, they don’t really need blockchain. This technology is very interesting when it encourages cooperation within a sector,” said Harold Kinet.

We have understood that if most of the current use cases are in large companies, it is in particular because they control their production chains from A to Z and they can afford it. Small SMEs, on the other hand, are more isolated. They may find the blockchain interesting if they start in consortium with other companies in their sector, according to several of our interlocutors. “To deal with their logistical, IT, data processing or trust issues. They can come together to create a shared register between them and there, the blockchain makes sense.”

“Blockchain is fundamentally inefficient. An Excel spreadsheet will do the job just as well, if not better.”

Edward Jacquin

data manager

But for some, even in these special cases, blockchain is irrelevant. “An Excel spreadsheet will do the job just as well, if not better,” claims Edouard Jacquin, Data Manager in the public sector and who was passionate about and studied the issue. For him, the blockchain leads to constraints instead of making life easier for companies: “the blockchain is fundamentally inefficient. Operating in a decentralized way means being less efficient since we will duplicate our database several times. is a duplicate Excel from which no rows can be removed. And each change must be validated by all.” Inefficiency that brings security, recognizes all the same this specialist in data and their use. According to him, the most disturbing thing is that “solutions already exist and they are just as or more relevant. It’s just that they are not trendy like blockchain.”

A cash discourse that is spreading more and more as the projects launched stop, for lack of relevance. It is also a good thing according to Denys Bornauw: “It is not so bad that there are projects that have crashed, it shows the limits and it lowers expectations. I see projects where the blockchain is relevant and others where it’s only a buzzword. You have to build an analysis grid to decide if it’s the right choice of technology depending on the project.”

After 13 years of existence, blockchain technology is therefore slow to convince outside the world of cryptocurrencies and art. In company, it is clear that it still has the label of an innovative project that seeks its relevance. Another observation is that companies active in the implementation of blockchain projects in Belgium are still developing, raising funds and finding customers. Proof that technology still attractseven if what was announced as a societal revolution did not clearly not yet met the promises placed in it. Now that expectations are lowered, maybe she will be able to find a place in some companies with a little less pressure.

The summary

  • 13 years after its first infancy, blockchain technology is still struggling to convince companies.
  • It seems reserved for those who have the luxury of being able to attempt a project that could fail and who master their production chain.
  • Some question the very foundations of the technology which would be inefficient for the business world.

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Beyond the buzz, has blockchain found its place in business?

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