[COLUMN] Is blockchain a fad or technology with a real business value?

The same as bitcoin is not a single cryptocurrency; cryptocurrency is not a single example of using blockchain technology. For that, after the first hype and overly exaggerated crypto-enthusiasm are over, now is the best time to support those successful and trustworthy blockchain companies that are still on the market, creating innovative products that are harbingers of a new era as we speak.

The increase in cryptocurrencies’ value during this period encourages interest between the more and less informed public. However, the majority still forms their opinion on blockchain technology based on the most popular and widely accepted terms, such as bitcoin, cryptocurrency, and blockchain, which should not be the case. As bitcoin is not a single cryptocurrency, cryptocurrency is not a single example of using blockchain technology.

On the other hand, when the prices of crypto assets are skyrocketing, we should focus more on the technology, enabling all this fast development, that is, on the blockchain.

Blockchain technology is being successfully used in the supply chain, e-identity, to enhance cybersecurity and privacy or peer-to-peer communication between smart devices. In short, its use is welcome in every field where we want to shift the trust from institutions to technology. The latter, indeed, is also the blockchain’s most significant innovation.

However, many still think blockchain is a hyped-up trend without a considerable long-term value. Let me remind you, the same was felt for the Internet, emails, corporate networks and many other technological innovations that have caused a significant shift in our society and thus changed the way we used to live.

In contrast, the European Commission identified blockchain as one of the technologies that will significantly impact the European space and technological power distribution in 2018. It also established the European Blockchain Partnership (EBP), where European countries are members, and Slovenia is even listed among the founders. EBP is developing a European Blockchain Services Infrastructure (EBSI), which aims to strengthen the security and privacy of public services in Europe through blockchain.

Within the EBSI, four focus areas have also been defined. The first phase of establishing the infrastructure will centre mainly on document notarization, diplomas, e-identity and secure data exchange. Slovenian blockchain experts are also active in the EBSI working groups, while the Slovenian Ministry of Economic Development and Technology cooperates and coordinates the operation of the EBP.

Are you curious about how the domestic economy exploits blockchain technology? Especially in the field of finance, Slovenians have been able to use blockchain-based solutions for several years. Thus, cryptocurrencies can be purchased at Slovenian-based crypto exchanges and safely stored in crypto wallets. With the help of payment infrastructure, cryptocurrencies can also be used as a payment in many Slovenian and foreign stores.

In 2018, Slovenia prepared the Demo Pilots II tender worth 73 million euros as an incentive for innovations based on advanced technologies, including blockchain. Thirty-two consortium applications were approved for co-financing, involving a total of 184 Slovenian companies, which gave impetus to the development of innovative blockchain products in the field of e-mobility, e-identity, energy, the Internet of Things and tracking in supply chains.

These solutions are now gradually moving from the pilot phase to the testing phase and then to production, ready for every-day use. Such a period before commercialization was expected, as the average development of technological solutions takes three up to five years and longer.

All the above are reasons now is the best time to support those successful and trustworthy blockchain companies that are still on the market, creating innovative products that are harbingers of a new era as we speak. They are by no means a fad or a hype, as is the current trend in bitcoin price, but a significant technological and social innovation.

*The article was first published as a column in the Slovenian newspaper Finance.