Gartner: Blockchain Tech Still in the Trough of Disillusionment

October 14, 2019 / by Crypto.IQ

According to a leading research and advisory company, Gartner, Blockchain technology is sliding into the Trough of Disillusionment and is not going to climb out of it until 2021.

The Trough of Disillusionment is the 3rd stage in Gartner’s Hype Cycle, which is a graphical representation showing a series of milestones emerging technologies and markets need to pass to gain mainstream adoption.

The life cycle of new technologies kicks off with a slow incline that can be attributed to an Innovation Trigger, followed by a rapid ascent to the Peak of Inflated Expectations. The cycle continues with a steep decline into the Trough, before a climb up the Slope of Enlightenment that paves the way to the Plateau of Productivity.

Blockchain is at that 3rd stage at the moment, deep in the Trough of Disillusionment. Its values have dropped significantly due to years of struggling to live up to the hype. Avivah Litan, vice president and distinguished analyst at Gartner, said, “Blockchain technologies have not yet lived up to the hype, and most enterprise blockchain projects are stuck in experimentation mode.”

“Blockchain is not yet enabling a digital business revolution across business ecosystems and may not until at least 2028 when Gartner expects blockchain to become fully scalable technically and operationally,” she added.

Gartner has identified key impediments to the adoption of blockchain technology by businesses. These include the inconsistency in governance standards and the lack of interoperability within the blockchain ecosystem. However, the drop in the excitement surrounding blockchain technology surprised the platform’s self-critics, such as Vitalik Buterin, Ethereum CEO and founder, who have been criticizing blockchain’s lack of scalability for many years.

For blockchain to scale up and work out of the Trough, Gartner says that developers need to cater to their prospective users better. And they also need to conceal technical jargon about things like “consensus algorithms” and “smart contract languages.” Average users are not interested in that.

Gartner is, however, optimistic that blockchain will eventually come to fruition, expecting the technology to climb out of the Trough around the year 2021. According to Litan, “By 2023, blockchain platforms will be scalable, interoperable, and will support smart contract portability and cross-chain functionality. They will also support trusted private transactions with the data confidentiality required. Altogether, these technology advances will take us much closer to mainstream blockchain and the decentralized web, also known as Web 3.0.”

Gartner breaks down Blockchain Technology into many related but operationally different sub-classes and charts them on the Hype Cycle chart, as well. For example, they have identified the Cryptocurrency Mining industry and adoption of Distributed Ledgers as ahead of Blockchain Technology in general, and already strolling up the Slope of Enlightenment. But, Decentralized Identity and Layer 2 Solutions, as well as most ancillary technologies, are behind Blockchain. However, Gartner applies different expected timeframes to each sub-class. 

The Trough of Disillusionment is only temporary. The advisory firm reports that other technologies and markets have successfully climbed out of the feared Trough of Disillusionment. Cloud Computing and Low-Earth Orbital Satellites are examples of further successes beyond blockchain technology.

But the Hype Cycle chart may disappoint overeager cheerleaders in the space. Supporters of smart contracts, privacy-enhancing multi-party computing, and crypto hardware wallets are all years away from the Slope of Enlightenment and the promised land of the Plateau of Productivity.