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As the world knows, the finest and smartest of all management consulting firms is McKinsey & Company.
So profound is their reputation of being ahead of the curve they need to publish a single report to ensure that a nascent trend becomes a consolidated norm.
Lucky for the world, in December 2015, McKinsey's attention turned into blockchain. At this point the wisest of all said:
Blockchains have the potential to radically remodel the financial market industry, with a significant impact on business models, reducing risks and saving costs and capital.
But the true sage also knows that it is never smart to make predictions without warning. As a result there were many.
So yes, blockchain would have truly revolutionized the world, increasing transparency and efficiency while reducing costs, but it also remained "largely untested in complex markets" and faced many adoption challenges.
Naturally, McKinsey covered his bets and said that the adoption of blockchain technology in the capital markets would be marked by four phases:
- adoption by a single company among legal entities
- adoption by a small sub-group of banks as an update to manual processes
- conversion of agreements between traders;
- and finally, large-scale adoption between buyers and sellers in public markets.
However, the conclusion was clear. Once these questions were resolved, the door would be opened for rapid dissemination.
By June 2018, McKinsey was proud to report (with the caveats in progress) that:
The insights of our analysis suggest that, beyond the hype, the blockchain has a strategic value for companies, allowing both the reduction of costs without disintermediation and, in the longer term, the creation of new business models.
Still damaging the fomo, they added:
Venture capital funds for blockchain start-ups have grown steadily to $ 1 billion in 2017. The blockchain investment model specific to initial coin offerings (ICO), the sale of cryptocurrency tokens in a new venture, is soared to $ 5 billion. Even the main players in technology invest heavily in blockchain: IBM has more than 1,000 employees and $ 200 million invested in Blockchain-based Internet of Things (IoT)
But feel sorry for the madman who believes in the flagship message of a McKinsey report, but neglects the warnings.
Fast forward to January 2019 – hence known as the post-Blythe blockchain – and the warning has become the rough line, while the top-line has become the warning:
So now let's hear the following:
It is clear that blockchain is a potential turning point. However, there are also emerging doubts. A particular concern, given the amount of money and time spent, is that little has been achieved. Among the many cases of use, a large number is still in the idea phase, while others are under development but without output. The bottom line is that, despite billions of dollars in investment, and nearly as many titles, evidence for practical and scalable use of blockchain is subtle on the ground.
IS:
McKinsey's work with financial services leaders over the past two years suggests that those of the "coalface" blockchain have begun to doubt. In fact, as other industries have equipped themselves, mood music at some levels in financial services has been increasingly cautious (even though senior executives have made claims to the contrary). The fact was that billions of dollars had been sunk, but almost no use case had a technological, commercial or strategic sense or could be provided on a large scale.
One thing we can be sure of, if McKinsey says it is, it must be this way. So read the rest of the report and cry.
We would like to add, if you believe in Occam's razor, now there must also be money in advising people not at invest in blockchain. (In which case we can have it? Thanks.)
Related links:
Because blockchain is a belief system – FT Alphaville
The insiders blockchain tell us why we do not need blockchain – FT Alphaville
The diminishing returns of blockchain fetishism – FT Alphaville
