Software giant Luxoft: Blockchain is the biggest technological tsunami in 2016, but it is still in the research and investigation stage

Excelian, an award-winning technology consulting firm under software giant Luxoft, recently released its 2016 technology report, Big Data: Technology Highlights, which describes the most important and disruptive technologies of 2016, such as financial technology and blockchain technology.

Blockchain is in the research stage

In the report’s “Three Technologies to Watch” section, the company lists three emerging technologies that businesses can understand and analyze. One of these technologies is blockchain, which the Excelian Research team described as “the biggest tsunami of 2016.”

The research report highlights the speed of blockchain development and indicates that the blockchain development community in the United States is very active. The report states:

“In the US, there’s an average of one blockchain conference a day. So it’s no surprise that early innovators are scrambling to get in on the action, financial technology is booming, and large enterprises are joining blockchain consortiums like R3 to embrace the threat of the technology rather than risk being disrupted by new entrants. It’s a two-pronged hype cycle led by both industry and technology that we haven’t seen in a long time.

Caught between regulatory conflict and serious security compromises

Despite the enthusiasm shown by enterprises, banks and financial institutions for blockchain technology, Excelian believes that this technology is still in the research stage. The research team divides technologies that have received a lot of support from enterprises and investors into four different stages: waiting, research, trial and adoption.

Specifically, the team listed a number of blockchain platforms and startups as examples, including Ethereum, R3 and Corda, which have received millions of dollars in funding. However, blockchain was listed in the research phase in Excelian's research report, while platforms like Google Cloud and Azure were listed in the experimental phase.

For the most part, blockchain is rightly relegated to the research and investigation stage, primarily because banks, businesses, and financial institutions have yet to find a way to integrate the technology into their existing systems, and are currently caught between regulatory conflicts and serious security compromises.

Blockchain - a complex but promising technology

However, the company acknowledged that the potential of blockchain is so promising that financial institutions are allocating hundreds of millions of dollars to try to integrate blockchain into next-generation technology.

The report states that

“It’s quite remarkable that blockchain, invented to disrupt banking and money management as we know it, has been embraced by the financial services industry and, to some extent, by the financial regulators – the very people it is meant to replace. In fact, the traction it has enjoyed has been driven by industry leaders, a fairly rare phenomenon for a complex emerging technology.