Blockchain falls out of favour
Not long ago, blockchain technology was touted as the go-to technical solution to a raft of government problems. From social security to smart contracts, blockchain was going to be the product that could revolutionise public services.
In the past, we explored the question of whether procurement needs blockchain technology in an article “Does Procurement Need Blockchain?“. In that piece, we laid out our perspective that blockchain, while innovative, requires lots of power and won’t fix procurement data problems.
The Hype Ramps Up
From 2016 to 2019, blockchain hype grew exponentially. Procurement teams read about its potential benefits. Some even claimed it could completely transform procurement operations and deliver major cost savings.
Governments from Washington to Taipei announced blockchain initiatives, and the UK’s Minister for Cabinet Office announced a review of blockchain for grant funding. Of course, some consultancies went to great lengths to promote the use of blockchain in government, including in land registry, digital identity and vaccine rollouts.
Behind the Hype: Persistent Issues
But behind the hype, blockchain was facing persistent issues from its emergence. Also, governments have gone cold on the idea of the blockchain, with demand for blockchain services down by over 80% since a high in 2019. Having spent the last four years looking at this technology, it seems that governments have decided that they have other fish to fry.
We’ve long been sceptical of the promise of blockchain in public services. Our main complaint is that most of the use cases for blockchain can be adequately met by using freely available and highly sophisticated databases rather than a somewhat arcane and inefficient product that has cachet because it is the tech du jour (Blockchain’s key feature, preventing data from being overwritten, also means that blockchain databases quickly become bloated and slow. Like a piece of knitting with no endpoint, a blockchain grows and grows).
There are times when life gives you lemons. Thankfully, you can also choose not to buy lemons. The good news is that governments appear to have worked that out for themselves.
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