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

Heralded as revolutionary, blockchain is struggling to convince in business. Too high expectations or irrelevant technology? Try to answer.

The blockchain was on everyone’s lips a few months ago. All the companies have gone there with their project using this technology of “blocks” and decentralization, known mainly through cryptocurrencies, but whose potential has been announced as exceptional. Between fashion, watchword and real interest in companies, it was sometimes difficult to resolve. Today, many hastily launched projects have failed and, aside from a few use cases, adoption seems slow. Worse still, it is the relevance of using this technology in business that is regularly questioned. 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 needed 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 is tantamount to removing an intermediary such as banks. We can compare the blockchain with a huge database where the history of all exchanges between users is stored of the block chain in question 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 product traceability, or to automatically execute smart contracts. 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 users of the blockchain, and that any participant can consult it whenever they want.

After the foreplay, 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, with us too.

You are buying 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 allows this information to be listed in a tamper-proof manner and made available to the consumer. A possibility that convinced the Carrefour group to launch into thehas the traceability of the blockchain version. Carrefour digitized the entire journey of a product, the Carrefour Quality Line pig of yesteryear, and used blockchain technology to ensure data reliability. 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 Auvergne chicken test phase, the project was resumed in 2019 in Belgium with the aim of extending it to other references.

“It’s not that bad that there are projects that have crashed, show limits and lower expectations. I see projects where blockchain is relevant and others where it’s just a buzzword.”

Denys Bornauw

Senior Business Group Leader at Agoria

After two years, the retail brand says it is satisfied with the initiative even if it does not intend to extend it tomorrow to thousands of references and justifies the choice of the blockchain: “We have a lot of products with several hundred pages that contain the local, animal nutrition and the entire supply chain that the product followed before arriving in the store.We have condensed this information.The blockchain allows us to guarantee the consumer the truthfulness of the information, information verified by an external control body. credibility that this technology brings to the information provided “, we are told at Carrefour, which remains more discreet about the use it makes of this initiative by its customers.

Too fast a craze

Traceability appears to be one of the aspects of the blockchain where companies find their account. At AB Inbev, we also turned to SettleMint, a Belgian company specializing in the implementation of blockchain projects, and Fujitsu. guarantee 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.

Attentive observer and actor of a sector that is still very young and evolving, Harold Kinet, CEO of Be Blockchain and on the initiative of the Walloon Walchain network, recognizes the slow penetration of technology compared to the effects of the ad who predicted a tsunami. “There is still a long way to go. At the time there was a bit too fast a craze. Use cases are coming drop by drop. It started with everything related to production chains with large companies. like Coca-Cola that uses technology for the traceability of its production, then the luxury sector has seized it with, for example, LVMH that uses it to certify and track some of these items to avoid counterfeiting “.

“There is a great cognitive barrier. It takes time to integrate into companies, because you have to train first, understand what it takes to try and apply it to your business.”

Harold Kinett

CEO Be Blockchain

Examples in large companies, there are several. But when the size of the company shrinks, the blockchain doesn’t seem to have convinced many peoplenor of having found its place. “There is a great cognitive barrier. It takes time to integrate into companies, because you first have to train, understand what it takes to be able to try to apply it to your business”, continues Harold Kinet. “Blockchain in business is currently being developed primarily through the use of Web3.” Web3 is what is heralded as the future of the Internet. It takes the place of version 1.0 and 2.0. Its applications and tools are based on blockchain technology which guarantees the decentralization of power to users and is no longer shared between a few large platforms as is currently the case. Anyway, that’s the promise.

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

As is often the case with technological revolutions, ads don’t follow the effects, or at least not necessarily the expected ones. Add to that an unfavorable economic environment for risky investments and you have part of the explanation. “The problem is that it is still an experimental technology. Very few companies can take the risk of testing concepts related to this technology,” according to Denys Bornauw. Because In addition to the financial risk of implementing a blockchain project, there is also the legal risk. The legal framework surrounding the use of 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 in understanding by the business world has not favored its dissemination. “Companies come to us asking us to use blockchain for this or that project. And in general, they don’t really need blockchain. This technology is very interesting when it encourages cooperation within an industry,” said Harold Kinet.

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

“The 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, the blockchain is irrelevant. “An Excel spreadsheet will do the job just as well, if not better,” says Edouard Jacquin, a data manager in the public sector who is passionate about and researched the problem. 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 as we will duplicate our database several times. It is a duplicate of Excel from which no row can be removed. And every change must be validated by everyone “. Inefficiency that brings security, equally recognizes this specialist of data and their use. According to him, the most disturbing thing is that “the solutions already exist and are just as or more relevant. It’s just that they are not as trendy as the blockchain.”

A cash discourse that is spreading more and more since the projects started stop, due to lack of relevance. It’s also a good thing according to Denys Bornauw: “It’s not that bad that there are projects that have crashed, show limits and lower expectations. I see projects where blockchain is relevant and others where it’s just a word of mouth. order. You have to build an analysis grid to decide if it is the right choice of technology for the project. “

After 13 years of existence, blockchain technology is therefore slow to convince outside the world of cryptocurrencies and art. Together, it is clear that it still has the label of an innovative project that seeks its relevance. Another finding is that companies active in implementing blockchain projects in Belgium are still developing, raising funds and finding customers. Proof that technology still attractseven if what was heralded as a social revolution did not evidently he has not yet fulfilled the promises contained therein. Now that expectations have subsided, he may be able to find a job in some companies with a little less pressure.

The summary

  • 13 years after its 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 that masters their own supply chain.
  • Some question the very foundations of technology that would be inefficient for the business world.

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