Time to check back in with blockchain. We did a whole show on the subject a while back. I spoke with Ron Quaranta, founder and chairman of the Wall Street Blockchain Alliance, all the way back in episode 12. That was when the hype about blockchain was sky high. It was supposed to transform our profession — many professions, in fact. It seemed back then like there was no problem that couldn’t potentially be solved through the use of blockchain technology.
And now? Well, the hype has cooled considerably, but the promise remains, and folks in accounting and finance remain intensely interested in the impact that blockchain will ultimately have on the profession.
Keith Nichols, general manager for small to mid-size firms with Thomson Reuters, is one of them. Keith was previously Thomson Reuters’ managing director for government, which meant he had significant say in the global strategy and business operations of the government practice with the tax and accounting business at Thomson Reuters. That means he was among the first to recognize blockchain’s potential to disrupt things like governmental tax transactions, land registries, and the like.
He’s been watching this technology for a while now, and he has some pretty interesting insights into the real potential of blockchain and how it might impact this profession and our society once the disillusionment wears out.
In this conversation, we cover:
- Real-world applications of blockchain.
- How our work will be changing.
- The government’s changing role in tax collection.
- Blockchain in the voting process.
- How blockchain will help the audit industry.
- What firms need to do to take advantage of future opportunities.
Listen to our conversation here.
Where is blockchain on the hype cycle?
The hype around blockchain has died off a bit lately, and we’ve seen evidence to support this: For the past few years, Tom Hood, CEO of the Maryland Association of CPAs and the Business Learning Institute, has taken futurist Daniel Burrus’s list of the “Top 20 Technology-Driven Hard Trends Shaping Our World,” and then asked more than 1,000 CPAs and finance and accounting professionals which of those trends will have the greatest impact on the profession over the next three years. Two years ago, blockchain came in at number 6. Last year, it fell to number 9.
That’s not too surprising, especially if you’re familiar with “Gartner’s Hype Cycle.” It’s a graphic representation of the maturity and adoption of new technologies, and it says most new technologies go through these natural peaks and valleys. Specifically, they hit what Gartner calls the “Peak of Inflated Expectations,” when everyone has great hopes for all of the problems these new technologies might help solve. Then, when the initial hype dies down, these new technologies enter what Gartner calls the “Trough of Disillusionment.” This is when people start to lose faith in these new technologies as they don’t immediately deliver on all of the promised results. Experiments and implementations fail to deliver, and interest kind of dissipates.
What’s really interesting is that it’s while these technologies are in the “Trough of Disillusionment” that most of the groundbreaking work is being done. Soon after, many new technologies enter what Gartner calls the “Slope of Enlightenment.” This is where, as Gartner writes, “more instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers.” In other words, they start to pick up traction.
So it would appear that blockchain is now in Gartner’s Trough of Disillusionment, which makes this the exciting time when the people who are actually going to make this technology useful start to emerge. That makes now the perfect time to keep your eye on blockchain, because you may be seeing some really interesting applications start to emerge in the not-too-distant future.
One of the areas almost every expert out there says will be significantly disrupted by blockchain technology is the audit. Everyone’s been waiting for that disruption to happen, and now they may not have long to wait. PwC Switzerland, for instance, announced last month that it is bringing a smart contract audit firm named ChainSecurity to bolster its blockchain-related audit abilities.
That’s just more proof that blockchain is very much still around, and it could still be massively influential. We are just now heading into the most exciting times for it.