Despite the buzz that blockchain technology has made in recent years, the Gartner blockchain hype cycle posits that the new tech is still not at the peak where mainstream adoption takes place.
Where then is blockchain per its growth rate? What exactly is the Gartner blockchain hype cycle, What stage is blockchain in this cycle in 2021, and what does the future hold? These questions are answered in this blog post, so ride along with us!
What is the Gartner hype cycle for emerging technologies?
The Gartner Technology Hype Cycle is a cycle for new tech innovations that was first published in 1995 by Gartner Inc, an enterprise research firm. The hype cycle proposes a standard model created by David Furlonger and can be used as a monitor as new inventions strive to journey onto mainstream adoption. This model was also used when we explained what is blockchain technology and what is a distributed ledger.
The Hype Cycle typically features the Gartner Curve in which the project life cycle is drawn based on expectations over time. There are four key stages in the Gartner curve including the innovation trigger, the Peak of Inflated Expectations, the Trough of Disillusionment, the Slope of Enlightenment, and the Plateau of Productivity.
According to the Gartner representation, every innovation passes through each of these stages before getting to the plateau of productivity in which the technology is now integrated into people’s normal lifestyle. Our last article, DAG vs Blockchain, shows how DLT can be implemented efficiently. Top tech firms like Facebook and its social connectivity innovation are at this latter stage. Data storage on cloud innovations has also wedged through these stages to become a growing part of how information is secured on centralized servers today.
What is the Gartner trough of disillusionment?
Every stage in the Gartner hype cycle is significant. Before the dwell on the subject of this headline, let us do a quick recap of the two previous stages in the Gartner hype cycle.
The Innovation Trigger stage is when the new tech breaks out or introduced to the world. At this stage, it has not yet been tested for its commercial sustainability, however, a few entities might have been exposed to its uniqueness. The peak of inflated expectations occurs when early adopters find this innovation disruptive and the success stories spur heightened expectations.
While these stages are crucial, for the sake of the rest of this article, an emphasis on the Trough of Disillusionment is pertinent. This is the point in which the new innovation has failed to meet the various expectations placed on it. The sustainability of the project is tested as products fail and founders tend to abandon their hyped innovation. At this stage, some projects are plunged into a transitional phase where their core ideologies get revamped. Most projects die off at this stage.
The other stage as seen in the curve is the slope of enlightenment where startups, business enterprises, and individuals begin to see how the new technologies can transform their processes and the plateau of productivity is marked by adoption.
Where is the Gartner blockchain hype cycle in 2021?
Per an earlier published blockchain hype cycle for blockchain technologies by Gartner in 2018, the emerging technology was placed at the trough of disillusionment. This was not surprising owing to the slowing of momentum in the projects and Initial Coin Offerings (ICO) that proved unable to sustain investors’ demand for more. The blockchain technology ecosystem and its attendant innovations including cryptocurrencies such as Bitcoin, Ethereum grew at a pace that could not be maintained.
The latest Blockchain Hype Cycle as of 2020, however, placed blockchain technology up the Slope of Enlightenment. This upgrade came after Gartner’s annual survey of blockchain service providers revealed that 14% of enterprise blockchain projects moved into production in 2020, up from 5% in 2019. This percentage growth is projected to grow by double digits in 2021, with three key fundamentals or trends fueling the push-up. These trends will be analyzed in the next section. Per the typical projection, the blockchain industry may hover around in this cycle for an indefinite number of years, however, with the unrelenting push by innovators around the world, graduation may soon be recorded.
What has caused us to hit this stage of the blockchain hype cycle?
The blockchain ecosystem has come a long way in the past decade. While the last Gartner blockchain classification back in 2018 placed doubts on the sustainability of blockchain innovations across the board, the major backers of the technology were optimistic that a surge up the curve is imminent. The reasons fueling this growth are highlighted below.
Maturation of Digital Assets and CBDCs
The first trend highlighted by Gartner is the maturation of digital assets including Central Bank Digital Currencies (CBDCs). This trend is marked by the embrace of Bitcoin as an asset class and a store of value by a growing number of institutional investors. These investors include but not limited to Stanley Druckenmiller, Paul Tudor Jones, and Michael Saylor of business intelligence firm, MicroStrategy Incorporated.
Monetary authorities include the US Federal Reserve Bank, the People’s Bank of China and others are beginning to explore blockchain technologies or distributed ledgers to develop a digital form of fiat money for use in payments. This trend also borders on the growth of decentralized finance and the emergence of a new set of financial services products, automated through smart contracts.
Blockchain in Supply Chain Industry
The second trend borders on the growing use of blockchain technologies in the supply chain industry. As the global supply chain industry grew more sensitive to businesses complying with standard Environmental, Social, and Corporate Governance (ESG) models, the need to substantiate these standings depends on data. This data must be presented in a transparent and trustworthy manner, giving blockchain technology the right use case for this task.
Blockchain Middleware Abstraction Layers
The third trend that pushed blockchain up the ladder is the rise of Blockchain Middleware Abstraction Layers. These are tools from platforms that solve the problem of bridging the gap between blockchain platforms and real-world enterprise data. Chainlink is one of these protocols with interoperability features across several protocols both on-chain and off-chain. Gartner foresees a growth in the number of these protocols as blockchain speeds up the mainstream adoption curve.
IoT Adopters in need of Blockchain
Last year, a study by Avivah Litan, VP Analyst at Gartner, made it clear that the Internet of Things (IoT) will push blockchain uses to the next level. IoT adopters are in need of decentralized applications due to their business model.
The fact that even big tech companies such as Amazon, Google, and Apple are working on blockchain developments confronts all good ICOs that they have to deal with this new technology too.
Where are we going next in the Gartner technology hype cycle?
The year 2021 in particular has been a spectacular one in the blockchain ecosystem with growing competition as new protocols get introduced seeking to outpace existing ones. The massive rediscovery of blockchain technology across the board is placing a huge demand that suggests interests at this current stage of the Slope of Enlightenment is never waning again.
From here, the technological innovation is billed to move up the curve to the Plateau of Productivity in the Gartner hype cycle blockchain curve. At this point, technological awareness is out in the open for both individuals and enterprises alike. Everyone is thus looking to integrate the technology or interact with it as much as possible.
Some of the emerging trends that will fast track the ascension of the technology to the Plateau of Productivity according to Gartner is its potential use in healthcare (Coldchain vaccine tracking, personalized medicine, and more) and societal benefits (boosting democratic elections through blockchain-based voting systems and fake news prevention through data authentication).
The blockchain ecosystem is dynamic, scalability is increasing, and new trends are often introduced all the time. Based on the dynamics of the market, this particular post will certainly require updating in the coming months or years.
Blockchain technology is a relatively new technology that is fast growing beyond infancy. The technology is journeying onto maturity, as its functionality and uniqueness are becoming a tool to enhance enterprise productivity across the board.
Per the Gartner blockchain hype cycle, the tech is currently ranked in the slope of enlightenment implying more enterprises, regulators, investors, and enthusiasts are beginning to see the superiority of the technology. There are emerging trends contributing to the growth of the blockchain industry, and more are bound to surface in the near to long term as inventors seek to harness the network capability to solve real-world problems.
Blockchain has already surpassed the worst challenges in its potential growth push, and we may begin to see more mainstream firms begin to incorporate it into their business processes moving forward. If you want to be an innovator as well then talk to one of our experts.
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