The initial excitement surrounding blockchain technology has significantly diminished, giving way to a more pragmatic view of its capabilities and limitations. Experts are now emphasizing that blockchain’s potential is best realized when integrated with technologies like Artificial Intelligence (AI) and quantum computing, rather than as a standalone solution.
The hype that began in the late 2010s, fueled by the rise of cryptocurrencies and non-fungible tokens (NFTs), has largely subsided. This shift has been highlighted by the recent Gartner Hype Cycle for blockchain, released in July 2024, which placed most blockchain-related technologies in the ‘trough of disillusionment.’ This phase indicates that expectations have not met reality, leading to a more cautious approach.
Adrian Leow, vice president in Gartner’s applications and software engineering leaders group, noted that the firm might not even release another hype cycle chart for blockchain, reflecting this waning excitement. He observed limited success in specific blockchain applications, such as the Vatican using NFTs to put its archives online. Leow believes that the significant value from blockchain is still several years away. “Blockchain technologies just really haven’t hit the heights that was promised,” he said. “This is not an overnight sensation.”
While some interest remains in related technologies like cryptocurrency and blockchain wallets, Leow doesn’t foresee widespread adoption in the near future unless blockchain is integrated with technologies like AI and quantum computing. He explained, “The technology is still going to evolve, but not on its own.” For instance, blockchain could enhance trust and security when combined with multiple AI agents in complex business processes.
A major hurdle for blockchain has been scalability and interoperability challenges across different ledgers and with other technologies, according to Leow. Furthermore, interest in blockchain at the executive level has waned, with Chief Information Officers (CIOs) now prioritizing investments in AI. This shift in investment priorities further diminishes the resources allocated to blockchain projects.
“Blockchain has a lot of promise, but it’s tactical,” Leow added. “The blockchain experimentation that’s happening is what you’re willing to burn, and it’s more an experiment to see what is possible, but it’s not replacing your existing processes or tools.”
Jim Fowler, CTO at insurance carrier Nationwide, offered a critical perspective on blockchain. He views blockchain as an example of how to avoid being distracted by new and exciting technologies. “Blockchain is a fantastic technology, and it’s a bright and shiny object that has zero to no use,” he told CIO.com’s Dan Roberts. “So stop investing in it. We talk about it not as stopping it but putting it on the shelf and saying, ‘Okay, we’ve gone as far as we need to at this point.’ “We understand it,” he adds. “We understand the prospects and the opportunity. We understand why it’s not being taken up. Let’s put it on the shelf, and every year we’ll revisit to see if something changed.”
Salome Mikadze, co-founder at Movadex, echoed this skepticism, noting that blockchain has yet to deliver practical benefits at scale. However, she pointed to the promise of blockchain in niche areas such as secure data sharing and supply chain scenarios. “Most of us agree that while it’s an exciting idea, its real-world applications are still limited,” Mikadze added. “In short, blockchain is on the shelf for now — something we check in on periodically, but not a priority until it proves its worth in the real world.”
Trevor Fry, an IT consultant, attributed the decline of blockchain’s relevance to the “crazy hype” surrounding digital art NFTs. According to Fry, most businesses haven’t found alternative applications for blockchain. “Blockchain was marketed as this must-have innovation, but in practice, it doesn’t solve a problem that many companies or people have,” he said. “Unlike AI and LLMs, which have real-world applications across industries and have such a low barrier to entry that everyone can easily try it, blockchain’s use cases are very niche, though not useless.” Fry pointed out potential benefits in supply chain tracking and data integrity where a secure record is essential. “But right now, it’s not solving a big enough pain point for most organizations to justify the complexity and cost and hiring people who know how to develop and work with it,” he added. “Until that changes, companies will keep investing in AI, automation, and tools that drive clear ROI instead of experimenting with blockchain ‘just because.’”
Despite these views, some IT leaders find immediate uses for blockchain. Eitan Prince, CTO of Mogul Club, a platform for micro-investing in real estate, uses blockchain to track property ownership. He sees blockchain as offering “unparalleled transparency, security, and efficiency” in digitizing real-world assets. Prince believes blockchain’s association with scams has hindered its adoption, however. “Most people associate blockchain with rug pulls, honeypots, worthless memecoins, and other scams,” Prince says. “And I do think that random memecoins and NFTs not associated with any real asset are useless.”
Nevertheless, Prince highlights the legitimate applications of blockchain, such as tracking real estate transactions, which often operate invisibly to end-users. “If a person were to transfer that ownership to someone else, we can trace the history of who owned it and for what value at any time,” Prince says. “That feels a lot safer to me than worrying about a piece of paper somewhere in your house.”
