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The Blockchain Market Is Finally Growing Up
It’s always nice to be proved wrong. Despite the blockchain market’s rapid evolution, I was worried that, in the energy industry at least, it was stuck in the peak hype. Solarplaza’s recent Blockchain2Energy Europe event allayed my fears, offering a refreshing change to the typical blockchain events of 2018 where blockchain was still viewed as the panacea to cure the world of all its ills. Promoted under the subtitle, “Blockchain beyond the hype: What’s the realistic added value of blockchain energy applications?,” Solarplaza endeavored to bring realism and pragmatism to the blockchain debate.
The Voice of Experience Is Finally Being Heard
Marzia Zafar from the World Energy Council presented a brief overview of the Council’s recent research into the energy industry’s sentiments toward blockchain. “Too early; too hyped-up; too much potential,” were three quotes that summed up opinions, and that resonate with Navigant Research’s views regarding the technology.
A case in point came from Michael Merz, CEO of blockchain developer Ponton, which is responsible for developing the Enerchain wholesale energy trading platform. His presentation articulated the limited number of blockchain use cases: yes, existing technologies can deal with most issues far better than blockchain can—any projects that are internal, or external projects with 1:1 communication requirements, are all best served by other technologies. And once a relevant use case is identified there are still a number of technological, organizational, regulatory, and financial hurdles to overcome.
You heard it right: a blockchain developer who publicly states the practical limitations of the technology. How different from the noise the typical blockchain startups make, telling the world that blockchain is set to cause disruption the likes of which we have never seen.
Blockchain’s Signal to Noise Ratio Is Improving
In my view, we are finally seeing the grown-ups coming out to play. This is partly because many startups have fallen by the wayside: unable to create a product that did what they promised, failed to attract a development partner, or ran out of cash as soon as the cryptocurrency market crashed. The market was awash with claims that blockchain would completely destroy the hegemony of industry incumbents, shifting power to consumers who would trade power between themselves using cryptocurrencies. Of course, these people rarely paid much attention to physics, who owned the wires on which of these trades would occur, or indeed the need to regulate an industry on which all of society relies.
Every failed dreamer increases the proportion of successful pragmatists targeting the industry. Those with direct experience of the technology and a broad understanding of its limitations are floating to the top. The signal to noise ratio of the blockchain hype engine is finally improving. A clearer picture is being painted of what can and can’t be done with the technology, and this is just what the industry needs.