Many existing platforms and projects that have received funds to build business blockchains have launched a product in 2019. But other than that, funding for these new companies has dried up as investors seek opportunities within cryptocurrencies and tokenization. As more people realize how a native cryptocurrency improves the decentralization of a blockchain, many industry experts see a change in perspectives.
Crypto assets and tokenization lead the charge
The start of blockchains business adoption dates back to Hyperledger and the R3 consortium . Many companies, attracted by the transparency offered by blockchains, became avid defenders in search of ways to implement this new layer of trust in their organizations.
Since then, many of these companies have seen silenced flows and interests, forcing them to turn to other channels within the space of the largest cryptocurrencies and distributed accounting space.
From retailers to mechanical companies, it seems that all industries are adopting blockchains, and some of them obviously would not benefit from having one in the first place. However, the birth of a new technology instills an acute fear of losing the efficiencies generated by innovation.
Business financing for blockchain startups has fallen almost 60 percent according to CB Insights estimates. From relying on venture capitalists to being forced to start, the challenges facing new blockchain companies in 2017 and 2018 have only been amplified in 2019.
Meltem Demirors, CIO of CoinShares, said “blockchain is dead” at the Invest New York conference. The Head of Digital Asset Data, Mike Alfred, also thinks that the use of enterprise blockchain is at least temporarily silenced. But unlike Demirors, Alfred does not believe that this results in the death of blockchain.
Highly undermined economic incentives
Executing a blockchain and inducing an environment with greater transparency is undoubtedly a radical change that could help a company gain public confidence and erode internal corruption. But does it work as it is without any real incentive?
Some processes such as supply chain management can really see a great benefit from the implementation of a blockchain. But most business blockchains between closed business networks believe they can replicate Bitcoin’s lack of trust without recreating the same economic incentives .
In short, Bitcoin works because people have a financial interest in it working. If a blockchain exists only for data transmission and there is no economic incentive within the chain, it is not really reliable since the data alone can be manipulated and are susceptible to a single point of failure.