How Blockchain Technology Is Transitioning From Hype To Practical Applications: Report

Blockchain technology has moved beyond its peak in the innovation hype cycle, marking a significant shift over the past two to three years, according to a new report.

Global Uncertainties Shaping Innovation

The past five years have been anything but normal, marked by the global COVID-19 pandemic and escalating armed conflicts, the report by International Association for Trusted Blockchain Applications states.

These disruptions have fundamentally reshaped industrial priorities and policy agendas, particularly in the tech and IT sectors.

The energy price hikes following Russia’s invasion of Ukraine and the subsequent disruptions to global supply chains have necessitated a complete overhaul of industrial strategies.

"Blockchain technology is not at the top of the innovation hype cycle anymore, nor has it been for the last 2–3 years," the report notes, attributing part of this shift to the cyclical nature of the industry, driven by the Bitcoin halving cycle every four years.

The Future Of Innovation

The report emphasizes that the next decade will see entire industries either thriving or struggling amid increasing cyber-criminal attacks, industrial asset threats, and a skilled labor shortage impacting hyper-automation and hyper-acceleration.

"Exponential technologies will have to deliver a lot more than parroting chatbots or meme coins," the report states.

It argues for a thorough assessment of technological capabilities to ensure they serve as integral components of future industrial frameworks.

Blockchain’s Practical Capabilities

Blockchain technology, according to the report, offers several key capabilities: flexible transparency options, secure automation, a rich governance toolbox, strong cryptographic building blocks and efficient settlement capabilities.

These features make blockchain particularly suitable for registry use cases and enhancing sector-wide performance through gamification and new financing options.

"Blockchain technology can gamify the key performance tableau of entire sectors and bring new financing options and processes to drive efficiency across and in between industry sectors," the report highlights.

It also points out that blockchain can enhance the resilience of infrastructures using on-chain logic and a unified tech stack.

Anndy Lian, an intergovernmental blockchain expert, praised key initiatives like EBSI, Catena-X, and DIVE for their potential to revolutionize sectors from supply chain to energy.

"The emphasis on sustainability and regulatory compliance is particularly commendable," Lian said, adding that interoperability challenges and fostering a robust ecosystem of developers and entrepreneurs are crucial for maximizing blockchain’s impact.

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Basile Maire, co-founder of D8X, emphasized the significant influence of regulatory landscapes on innovation.

"The report illustrates the transformative potential of tokenized assets in financial markets," Maire noted, highlighting D8X’s role in this transformation by offering derivatives collateralized in tokenized yield-bearing tokens.

Michael Repetny, a core contributor at Marinade, said blockchain projects are no longer in a ‘hype' phase.

“There are a lot more practical use cases and applicability across public and private sectors," he said. Repetny also highlighted the role of regulatory frameworks like the EU’s MiCA in fostering growth and partnerships among blockchain projects,” he said.

Blockchain In Finance

The report underscores that blockchain has already made significant inroads into the heavily regulated finance sector.

It argues that the coming decade of exponential technologies will offer more financial leverage options, not fewer.

"It is not an echo of Silicon Valley's techno-optimism – but if we extrapolate the trend of technological breakthroughs at various fronts, the demographic erosion of our educated workforces in the first world and our tumbling democratic foundation, then innovation is a must, not an option," the report states.

For more insights and discussions on the future of digital assets, attend Benzinga’s Future of Digital Assets event on Nov. 19.

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