After a couple of years of hype, major companies are starting to abandon blockchain.
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Blockchain, Once Seen as a Corporate Cure-All, Suffers Slowdown
Many companies will halt their blockchain tests this year
Corporate America’s love affair with all things blockchain may be cooling.
A number of software projects based on the distributed ledger technology will be wound down this year, according to Forrester Research Inc. And some companies pushing ahead with pilot tests are scaling back their ambitions and timelines. In 90 percent of cases, the experiments will never become part of a company’s operations, the firm estimates.
Even Nasdaq Inc., a high-profile champion of blockchain and cryptocurrencies, hasn’t moved as quickly as hoped. The exchange operator, which talked in 2016 about deploying blockchain for voting in shareholder meetings and private-company stock issuance, isn’t using the technology in any widely deployed projects yet.
“The expectation was we’d quickly find use cases,” Magnus Haglind, Nasdaq’s senior vice president and head of product management for market technology, said in an interview. “But introducing new technologies requires broad collaboration with industry participants, and it all takes time.”
Blockchain is designed to provide a tamper-proof digital ledger -- a groundbreaking means of tracking products, payments and customers. But the much-ballyhooed technology has proven difficult to adopt in real-life situations. As companies try to ramp up projects across their businesses, they’re hitting problems with performance, oversight and operations.
Hype Versus Reality
“The disconnect between the hype and the reality is significant -- I’ve never seen anything like it,” said Rajesh Kandaswamy, an analyst at Gartner Inc. “In terms of actual production use, it’s very rare.”
That could be bad news for makers of blockchain software and services, which include International Business Machines Corp. and Microsoft Corp. They’re aiming to make billions on cloud services that help run supply chains, send and receive payments, and interact with customers. Now their projections -- and investors’ expectations -- may need to be tempered.
“Blockchain is supposed to be an important future revenue stream for IBM, Microsoft and others in equipment sales, cloud services and consulting,” said Roger Kay, president of Endpoint Technologies Associates. “If it materializes more slowly, analysts will have to make downward revisions.”
IBM, which has more than 1,500 employees working on blockchain, said it’s still seeing strong demand. But growing competition could affect how much it can charge clients, according to Jerry Cuomo, vice president of blockchain technologies at IBM.
Microsoft also remains upbeat. “We see tremendous momentum and progress in the enterprise blockchain marketplace,” the company said in a statement. “We remain committed to developing cutting-edge technology and working side-by-side with industry leaders to ensure business of all types realize this value.”
So far, IBM and Microsoft have grabbed 51 percent of the more than $700 million market for blockchain products and services, WinterGreen Research Inc. estimated earlier this year.
For a large swath of companies, blockchain remains an exotic fruit. Only 1 percent of chief information officers said they had any kind of blockchain adoption in their organizations, and only 8 percent said they were in short-term planning or active experimentation with the technology, according to a Gartner study. Nearly 80 percent of CIOs said they had no interest in the technology.
https://www.bloomberg.com/news/artic...ffers-slowdown
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The Bitcoin Price Is Tanking -- Here's Why
Billy Bambrough
Forbes
Jul 31, 2018, 11:16am 9,339 views #Crypto
The bitcoin price bull run over the last month, which saw it climb from around $6,300 to highs of $8,400 in a matter of weeks, could be over.
Bitcoin has slumped by 5% over the last 12 hours, falling well below the psychological $8,000 mark as traders and investors fret over coming tax crackdowns and blockchain-based applications being adopted by the traditional financial institutions.
Bitcoin hit lows of $7,675 at pixel time, down from daily highs of $8,168, according to CoinDesk data.
Meanwhile, other cryptocurrencies are suffering — and many of them haven't had quite the bull run bitcoin has over recent weeks to cushion the fall.
Ethereum is down by 6% over the last 24 hours, while ripple is down around 4% and bitcoin cash is off by 5%.
South Korea, which has emerged as one of the most important markets for bitcoin and cryptocurrency in recent months due to its large volumes of trading, is mulling whether to pass a law that would end tax benefits for cryptocurrency exchanges.
Local authorities were cited as saying “cryptocurrency transaction brokerage is not effective in generating added value.”
"While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security," said Hong Seong-ki, head of the country's cryptocurrency response team South Services Commission. "We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible."
Meanwhile, investors have been rattled this week by reports bank-owned currency trading utility CLS, along with enterprise software giant IBM, are teaming up to trial the blockchain-based Ledger Connect, an application that offers services from different vendors, with some nine financial institutions, including international heavyweights Barclays and Citigroup.
LedgerConnect will allow financial institutions to access distributed ledger technology-based services in areas such as know-your-customer processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data.
A report out earlier today from Wired magazine shone a light on some of the issues and problems many power-hungry bitcoin miners are facing around the world as cities and governments try to find a way to manage them.
“These companies are using extraordinary amounts of electricity – typically thousands of times more electricity than an average residential customer would use,” a spokesperson for the New York State Department of Public Service told Wired. “The sheer amount of electricity being used is leading to higher costs for customers in small communities because of a limited supply of low-cost hydropower.”
A blockchain expert with auditing firm PwC called the current mining energy crisis a "crucial moment for bitcoin."
It was revealed by CoinDesk today the first coder to work alongside bitcoin's pseudonymous creator Satoshi Nakamoto, Martti 'Sirius' Malmi, is joining a team of developers launching a new cryptocurrency called axe.
However, there's plenty of good news about at the moment for bitcoin and cryptocurrencies.
The U.S. Securities and Exchange Commission (SEC) is currently weighing whether to approve a bitcoin exchange-traded fund (ETF), a request filed through the Chicago Board of Exchange (CBOE) by New York-based VanEck and blockchain platform SolidX.
A decision is expected in August, though many are wary it could be delayed for a number of months.
Elsewhere, a survey out late last week suggested the bitcoin and cryptocurrency investment market has plenty of room to grow.
According to the poll of almost 2,000 U.S.-based investors, just 2% of investors say they currently own bitcoin, and less than 1% plan to buy it in the near future. While most investors say they have no interest in ever buying bitcoin, about one in four (26%) say they are intrigued by it but won't be buying it in the near future.
https://www.forbes.com/sites/billyba.../#80e0e357c52a
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