Blockchain projects to be quietly shelved in favour of traditional processes

Data analyst GlobalData has poured cold water on the potential success of many new blockchain-based projects.

The company has claimed that many initiatives will be “quietly shelved in favour of more traditional approaches” or end up reducing their dependence on blockchain technology.

Blockchain has gained huge publicity in the past couple of years – primarily from its role as a digital ledger for transactions made through cryptocurrencies, such as Bitcoin. But many industries, including travel, have been looking at how it can be used in their sectors.

In travel, Australia-based OTA WebJet has created a new accounts reconciliation system using the technology, while the Canadian government is testing a blockchain-based project for traveller identification.

Lufthansa is also examining how the technology could be used through a partnership with Winding Tree, a specialist in blockchain-based B2B travel bookings; and Singapore Airlines plans to launch a digital wallet for its KrisFlyer loyalty programme using the technology later this year.

But in a new report, GlobalData says the “the market is awash with absurd claims about the benefits of blockchain technology”.

Despite this skepticism, GlobalData does admit:

“There are some key domains where the ability to execute distributed transactions without relying on a single central authority will bring significant value.

“While blockchain technology will have lost much of its gloss by 2025, it will have found its way into the heart of many key business processes; especially those involving multiple, disparate, participants.”

Gary Barnett, GlobalData’s chief analyst, technology thematic research, argues that blockchain is now entering “a new phase” with more focus on finding practical uses for the technology.

‘‘Over the next 24 months the more outlandish claims made by proponents of blockchain will be debunked and technology providers and users alike will begin looking with clearer eyes at the narrow but significant set of use-cases where blockchain and distributed ledger technology can add real value.”

GlobalData says the technology would be seen as a “powerful antidote to the high fees” charged by intermediaries, as it allows individuals, corporations and devices to carry out transactions independently of these third parties.

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Rob Gill

About the Writer :: Rob Gill

Rob Gill has been writing about the travel industry since 2001 when he joined the features department at Travel Trade Gazette in London, having previously worked for local newspapers in the UK for five years.

He was also city and finance correspondent at TTG before later becoming editor of ABTN (Air & Business Travel News) and then digital editor of Buying Business Travel.

He is now an award-winning freelance journalist writing about the leisure and business travel industries for B2B magazines and websites. He has travelled extensively for both business and pleasure, but is mostly based in London these days.

 

Comments

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  1. Renold

    Just that GlobalData says, it does not mean it will happen!
    What we see, is a technological gap that is yet to be mastered. While the hype is too strong, there is a plethora of business needs predicted to enjoy benefits of blockchain technology in near future. This is true based on assumptions. E.g. Ethereum network will scale and reach millions of transactions per second. If such assumptions come true, then all benefits we ‘ve heard about will come true as well. So one should not be talking anymore about blockchain in general, but for particular aspects such as network performance increase, etc. And it is known that there are no indications such assumptions not to come true.
    Until this happens, many use combined technology stack to address their proof of concept, e.g. java, databases etc. But this does not mean Blockchain projects are quietly shelved.

    And I fully agree with Douglas Rice’s “clickbait” comment!

     
  2. Fabian Bartnick

    Data analyst GlobalData has poured cold water on the potential success of many new blockchain-based projects. – REALLY?!?!? and how is that different to the start up environment that we have seen exploding over the last few years – gosh now we even have 15 year old start ups who are afraid of calling themselves a business for the fear of being not “cool” anymore.

    Blockchain has benefits, and yes, a lot is overhyped, partly due to the Cryptocurrency element of the eco systems (which in itself though has shown a new era of business funding, trading and company operations).

    Travel is perfectly primed for the technology, yet the technology might not be ready for a few years before it can fully take over the space. But valid user cases in payment, loyalty, integrations, solving data hostage, replacing old tech, etc.

     
  3. Douglas Rice

    How does the headline square with the content of the article? Not! The article was thoughtful and accurate but the term “clickbait” comes to mind regarding the headline.

     
  4. Richard Vaughton

    Good article. Elements of it will disrupt several transactional sectors. Crypto is possibly becoming speculative assets so can be exchanged seamlessly but its not a magic wand and many ICO’s were game playing build and burns. The serious ones are solving real world problems on price.transparency.fraud.

     
  5. Roberto Da Re

    I agree with Max that Blockchain is not a distribution magic wand .. just technology never is a magic wand for a business problem.. however ..
    as Global Data itself states :

    “There are some key domains where the ability to execute distributed transactions without relying on a single central authority will bring significant value”
    and again
    “…technology providers and users alike will begin looking with clearer eyes at the narrow but significant set of use-cases where blockchain and distributed ledger technology can add real value”..

    Beyond the (in my opinion )”click bait” report and title to the article .. there are some very specific cases in Travel where Distributed Ledger Technology can be a game changer and provide huge value by delivering automation efficiencies, access to data and enable new distributed business models to be implemented at a fraction of the cost of what it would otherwise take to do it in the traditional way.

    But like anything .. pick the right priority for your business .. and pick the right tool for the job

     
  6. Max Starkov - Founder & Director at HEBS Digital

    The much-promoted use of blockchain in hotel distribution is another affirmation that we are an industry of buzzwords, indeed! Many people are getting overly excited by these new technologies and their perceived “magic wand” ability to solve industry deficiencies.

    Before we all jump on the blockchain bandwagon, the industry needs to deal with the fundamentals in distribution first: optimize your direct channel, fix the 6-year old property website, get a better CRS and WBE, improve your SEO, create your Google AMP presence, launch your multichannel marketing, optimize your social media profiles, get better business intelligence and analytics tools, finally do something about CRM to better engage and retain customers, etc.

     
 
 

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