Digital Revolution or Illusion: What's Happening to Blockchain Today

04, Feb - NEWS

Blockchain was heralded as a revolutionary technology that would transform the financial system, business, government and everyday life. It promised to eliminate intermediaries, create decentralised networks and improve data security. However, despite the ambitious predictions, the reality has been more complicated, as blockchain has encountered a number of limitations that prevent it from becoming a ubiquitous technology, which is why loud promises are still promises.

This article looks at whether blockchain is truly a digital revolution or remains an overrated concept that has yet to live up to expectations. We will look at its key uses, limitations and prospects. And finally, we'll find out what's happening with blockchain today.

Blockchain: A game-changing innovation

Blockchain has been hailed as a true technological revolution, abolishing intermediaries and creating decentralised, peer-to-peer networks. Thanks to its architecture, it allows users to make secure, immutable and transparent transactions without the involvement of third parties. In 2017, several players in the digital age were interested in this innovation. Philippe Rodrigues, president of the Bitcoin France association, wrote a book called ‘The Blockchain Revolution’, while Stéphane Loyon, author of ‘The Big Bang of Blockchain: the second revolution of the internet’, also foresaw real changes in the world influenced by blockchain, in the economic, political and social spheres, as powerful as the internet.

Today, blockchain is present in many industries, from finance and logistics to healthcare and government systems. Despite this, however, its integration into the real world is far from the promised revolution. After all, in theory everything was simple, but due to the human factor and a huge number of technical nuances, everything turned out to be much more complicated. 

Where is blockchain used today?

There are several areas where blockchain is actively used today. We'll take a closer look at each one and see whether or not blockchain is actually viable. Here are the main areas of use:

• Economic sphere;
• Security;
• Healthcare;
• Money transactions and the like.

One of the main advantages of blockchain is economic. Based on peer-to-peer exchanges, it eliminates intermediaries in transactions. This avoids the extra fees that are usually charged by banks, payment processors, platforms like Uber and Booking, which is why blockchain has enabled the creation of alternatives to these fee-based platforms. For example, Open Bazaar (blockchain-based Ebay) brought buyers and sellers of goods and services together without intermediaries, and therefore at lower prices. However, the service shut down in 2020 as the hype was expected, and it ended up with very, very few users. 

One of the main innovations of blockchain is smart contracts, which allow the terms of agreements to be fulfilled automatically, without human intervention. This technology appeared in the Ethereum blockchain. Another important application of blockchain is the transfer of money. Blockchain, particularly thanks to the cryptocurrency Bitcoin, has penetrated the banking sector. Once this digital currency is accepted by the parties involved in the transfer, transactions go through the blockchain without banking intermediaries and with very low costs.

This is especially true in developing countries where traditional banks charge high fees for transfers. For example, in 2013, Kenya launched Kipochi, the first bitcoin wallet for mobile payments. It allowed residents of the country to reduce the cost of international transfers. However, after the transaction, users had to find intermediaries to convert bitcoins into the national currency. Blockchain is also being used in insurance. It allows personalised insurance to be offered on-demand in terms of the nature and duration of the insurance. This process can be done through applications that utilise blockchain.

Why hasn't blockchain become a global revolution?

Despite its impressive potential, the mass integration of blockchain into everyday life is still far from reality. But firstly, blockchain remains a complex technology and it is not yet sufficiently democratised, as large companies are already using it in specific business processes, but for SMEs the technology remains difficult to access. Secondly, blockchain-based cryptocurrencies are prone to high volatility. For example, bitcoin was worth less than €1,000 in 2017, rose to €53,000 in 2021, and then experienced severe drops.

Volatility creates challenges for using cryptocurrencies as a means of payment. For example, bitcoin surpassed the €100,000 mark in 2024, but remains a volatile asset. In addition, legal issues and regulation remain a major barrier. Many states do not recognise cryptocurrencies as legal tender, and financial regulators impose strict restrictions on their use.

Blockchain and Traditional Institutions: Co-operation or Competition?

Although blockchain was created as an alternative to the banking system, many financial institutions are now adapting it to their needs. For example, the European Central Bank (ECB) is already developing a digital euro. This cryptocurrency will be managed by government regulators and will provide the same stability as the traditional euro.

Blockchain is also being used in banking to speed up cross-border payments, reduce transaction processing times and improve data security. However, traditional players want to retain control by integrating blockchain on their own terms, which goes against the original philosophy of decentralisation.

Blockchain has indeed changed some areas, but it has not yet become the revolution that experts predicted. One of the main problems is that people and companies still trust centralised systems more than decentralised networks. However, technology is not standing still. Perhaps in the coming years, blockchain will adapt, and new solutions will reduce costs and make it more convenient for mass use.

Summary: What's happening with blockchain today

Blockchain remains one of the most talked about technologies of the last decade. Despite loud claims, it has yet to replace traditional financial institutions. However, its potential cannot be ignored. It may indeed change the global economy in the future, but for now, its adoption remains limited. Blockchain is not yet a revolution, but the future will tell if it will be part of the new digital age.