Enterprise Blockchain is a great stepping stone to public blockchain success
Blockchain is one of the hottest buzzwords out there. Developers are flocking, investment dollars are pouring in, and talk of a disruption similar to the invention of the internet is frequently heard.
However, despite huge media interest and a $200 billion cryptocurrency market, usage of blockchain is almost negligible at the moment. There are only a few Ethereum dApps with more than 10,000 monthly active users (MAUs). Even bitcoin is only used by no more than 12 million people all over the world; nothing to rival any global online service.
At the same time, a lot is happening in the enterprise world. Though we are still some time away from core services running on blockchain, the space is buzzing with activity. According to a recent PWC global survey (August 2018), 84 percent of global organizations are involved in blockchain in one way or another, with 64 percent having a project underway. In less than two years, Gartner has counted roughly 400 consulting projects for enterprise blockchain and anticipates the generation of $3 trillion in value by 2030. Blockchain consortia are popping up like mushrooms and boast the biggest names in tech, banking, retail, shipping, and automotive.
Although the crypto community largely treats it as a separate universe, this booming enterprise market is a great opportunity to push forward blockchain in general, and the development of public blockchains in particular. With large-scale public blockchains and dApps’s breakout optimistically still 3–5 years away, private and permissioned blockchains are the only place where large-scale experimentation can take place today. Engagement of a large number of organizations and developers can build the experience and confidence for using public blockchains.
This hypothesis has its roots in none other than the development of the internet, to which blockchain is often compared in its impact and magnitude. In the early 90’s, most corporates would not go anywhere near the public internet. However, they did start to invest heavily in corporate intranets with players like IBM, Xerox, and Microsoft battling for market dominance and standardization in the nascent market. In fact, even at Netscape, which is mostly known for its browser, 72 percent of 1997 revenues came from corporate customers. For many companies, intranets were the first step into the internet world. Their growth heralded the arrival of online services, ecommerce, the cloud in the 2000’s, and beyond.
Especially in the current climate, progress in the enterprise market makes a lot of sense. First, the market is huge, and opportunities abundant. Second, it is far less influenced by the recent crypto downturn and bubble burst, whereas capital isn’t negatively impacted by the shrinking ICO market. Third, it is a great opportunity for new blockchains to reach high usage numbers and TPSs (transactions per second), which would take much longer to achieve in the public space due to technology limitation and a current lack of interest among consumers.
Of course, we have to acknowledge the challenges in this market as well. The enterprise market is still in its infancy, with some commentators comparing it to the internet/intranet market in the late 80’s and early 90’s. Many companies are exploring blockchain without identifying a true need and a solid business case, which makes it much harder to succeed. Finally, many organizations find it tough to carry blockchain projects beyond the PoC threshold, with only four percent of projects reaching “live” status according to Gartner.
In spite of those challenges, the enterprise market presents a unique opportunity to drive blockchain usage and technology forward at a faster pace, and bold organizations that tap this market early will gain an advantage in the long run.
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