Forrester Research has just published a report that states that some establishments are adopting the use of the term blockchain because it has become overhyped. The report, published on the 5th of November, was titled “Predictions 2019: Distributed Ledger Technology”. According to the report companies are now using the term blockchain and are now adopting the term distributed ledger technology (DLT). The reports state that many establishments are overhyping the benefits of blockchain and using it to repackage their already existing services. An action the research termed as “blockchain washing”.
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Blockchain washing is the term the report used to describe networks that claim to be based on the blockchain but lack the characteristics of this emerging technology. The research also pointed out that the term can carry negative connotations that are associated with the volatility of cryptocurrencies. The research suggested that the adoption of blockchain is going to reduce even if it is currently making headway. The paper stated:
“On the services and tools side, we are going to witness a steady and cautious progress in the adoption of blockchain. There is caution because the technology is yet to prove to be a reliable, significant revenue stream for service and software providers. We believe 2019 isn’t going to be different”.
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One of the analysts, Marsha Bennett said that the technology requires a level of cooperation that isn’t a requirement in other technologies. In his words:
“When it comes to the technology, there are parallels. The difference is that when it comes to the internet, one company like eBay or Amazon can decide to do something that will cause a big change. With blockchain technology, the case is different. A single company cannot disrupt the system. This is a play on the blockchain ecosystem”.
According to the research, soon, blockchain technology is going to be used primarily for tokenization without the use of cryptocurrencies. Already, some companies have started to capitalize on the blockchain hype. More people are becoming conversant with this emerging technology and so corporations are trying to take advantage of it. Some companies are planning to launch ICOs while some others are becoming successful by simply adding the word blockchain to their name. A typical example of this is a former beverage production company that was named Long Blockchain Corp. Long Blockchain Corp joined the blockchain industry in January this year after it changed its name from Long Island Ice Tea to Long Blockchain Corp. This move led to a 500% rise in stock price because of the blockchain frenzy at the time.
Back in January, the United States SEC suggested that companies within the United States that changed their names simply to include the word blockchain may face regulatory scrutiny. The Chairman of the SEC, Jay Clayton, said that it has become a trend for companies to add the word blockchain to their names in a bid to capitalize on the blockchain frenzy even when they don’t offer services or products that are based on the blockchain technology.