A new report from Forrester Research says the buzz around blockchain, a technology that creates tamper-proof records across multiple computers, is so over-hyped that some companies are dropping the word altogether.
According to Forrester, firms are ditching the b-word in favor of “DLT,” which is shorthand for distributed ledger technology—a more descriptive, if less catchy, term.
The report comes at a time when blockchain marketing is everywhere, including during the recent World Series, when IBM touted its blockchain services in TV commercials.
While blockchain is an important new technology, some firms are over-hyping its usefulness or simply repackaging existing services—a practice the report, which endorses the use of “DLT,” describes as “blockchain washing.”
“The networks that are live or under development vary greatly and frequently lack key characteristics that many regard as essential components of a blockchain,” the report states, adding the term blockchain can also carry negative “wild west connotations” of cryptocurrency.
The report, however, isn’t down on blockchain/DLT altogether, predicting that a “blockchain winter” may be looming, but that the technology is moving forward.
“On the tools and services side, we’ll witness steady but cautious progress. “Cautious” because DLT hasn’t proven to be a significant, reliable revenue stream for software and service providers, and 2019 won’t be any different,” the report says.
The fitful emergence of blockchain is similar in ways to other groundbreaking technologies like online shopping and cloud computing, both of which were the subject of unrealistic hype before later becoming mainstream.
Martha Bennett, a Forrester analyst and co-author of the report, cautioned that the parallel is not perfect as blockchain requires a level of cooperation among companies that the other technologies do not.
“There are parallels with the Internet but what’s different is that, with the Internet, a single company like Amazon or eBay can aspire to do something and create a big change. Blockchain is different because if one company says ‘I’m going to do something, it doesn’t matter. This is an eco-system play.”
The report also predicts that, in the near future, the most innovative work on blockchain will center on the tokenization of assets. Such tokenization, which doesn’t involve cryptocurrency, is already gaining traction in the real estate sector, where companies like Harbor are using distributed ledger technology to divide ownership in new ways.
As for the use of the term “blockchain,” the advocates for “DLT” face an uphill battle. A Google search for “blockchain” returns 215 million websites, while “distributed ledger technology” returns only 1.3 million.