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Blockchain's transformational impact on business

Blockchain's transformational impact on business The business impact of blockchain is forecast to be transformational across most industries within five to ten years says Gartner.

The market analysis and research firm recently expounded on the Gartner 2019 Hype Cycle for Blockchain Business, which provides an overview of how blockchain capabilities are evolving from a business perspective and maturity across different industries.

David Furlonger, distinguished research vice-president at Gartner, says, "Even though they are still uncertain of the impact blockchain will have on their businesses, 60% of CIOs in the Gartner 2019 CIO Agenda Survey said that they expected some level of adoption of blockchain technologies in the next three years. However, the existing digital infrastructure of organisations and the lack of clear blockchain governance are limiting CIOs from getting full value with blockchain."

Gartner refers to several key industries that are likely to continue to experience the impact of blockchain.

The company says banking and investment services industries continue to experience significant levels of interest from innovators seeking to improve decades old operations and processes... "however only 7.6% of respondents to the CIO survey suggested that blockchain is a game-changing technology."

That said, nearly 18% of banking and investment services CIOs said they have adopted or will adopt some form of blockchain technology within the next 12 months and nearly another 15% within two years.

"We see blockchain in several key areas in banking and investments services, primarily focused on permissioned ledgers," said Furlonger. "We also expect continued developments in the creation and acceptance of digital tokens. However considerable work needs to be completed in nontechnology-related activities such as standards, regulatory frameworks and organisation structures for blockchain capabilities to reach the Plateau of Productivity - the point at which mainstream adoption takes off, in this industry.

Blockchain's transformational impact on business

Gartner also refers to blockchain in gaming. According to the company, in the fast-growing esport industry, blockchain natives are launching solutions that allow users to create their own tokens to support the design of competition as well as to enable trading of virtual goods. The tokens provide gamers with more control over their in-game items making them more portable across gaming platforms.

"High user volumes and rapid innovation make the gaming sector a testing ground for innovative application of blockchain. It is the perfect place to monitor how users push the adaptability of the most critical components of blockchain: decentralisation and tokenisation," said Christophe Uzureau, research vice president at Gartner. "Gaming startups provide appealing alternatives to the ecosystem approaches of Amazon, Google or Apple, and serve as a model for companies in other industries to develop digital strategies."

In retail, blockchain is being considered for "track and trace" services, counterfeit prevention, inventory management and auditing, any of which could be used to improve product quality or food safety, for example. Whilst these examples have value, the real impact of blockchain for retail industry will depend on supporting new ideas - such as using blockchain to transform or augment loyalty programmes.

Once it has been combined with the IOT and artificial intelligence (AI), blockchain has the potential to change retail business models forever, impacting both data and monetary flows and avoiding centralisation of market power.

As a result, Gartner believes that blockchain has the potential to transform business models across all industries- but these opportunities demand that organisations adopt complete blockchain ecosystems.

"Without tokenisation and decentralisation, most industries will not see real business value," the company adds.

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