In life – and business in particular – we’re frequently told not to believe the hype. But this saying doesn’t always ring true when it comes to emerging technologies.
For new technology to reach the mainstream it really needs momentum, and this often comes in the form of a hype cycle.
One of the strongest blockchain use cases we’ve seen to date is security tokenization, and this technology has been much-hyped for the past year. However 2019 is the year in which we will start demanding solid results from tokenizing tech, and watch it come of age.
Bursting the hype bubble:
To appreciate why 2019 will be a year of realisation for security tokenization, first you have to understand how the hype cycle works. Traditionally, it can be divided into five phases:
We’ve already seen tokenization go through stages one and two; the media have discussed it at length, and most companies in the financial services industry are aware of the potential it offers their business. However, this is a double-edged sword.
While the education on the benefits of tokenization is less required, we are about to enter a trough of disillusionment. Look no further than Apple’s Steve Wozniak, who recently commented that “a lot of the blockchain ideas are really good; by coming out early they can burn themselves out by not being prepared to be stable in the long run”.
Timing is everything:
Mr. Wozniak isn’t anti-blockchain; he has publicly observed that its decentralized set-up and total trustworthiness enable real implementation potential.
However his comment about launching too early is fairly poignant when it comes to the adoption of security tokens.
During the hype, many enterprises invested money into prototype projects or proofs of concept – and some were quick to talk about their high expectations. As with any project of this nature, many of these task forces inevitably fell by the wayside, and those expectations were left looking fairly over-inflated.
However, beyond the bluster, companies have been working to drive tokenization forward, by creating frameworks that enable the development of industry-changing solutions.
Step forward stability:
Many of the prototype projects that we mentioned earlier are now coming to an end, and we’re beginning to enter a stage of stability. Security tokenization has emerged as one of the big game-changers when it comes to blockchain’s potential, and more industry players are building on the groundwork that companies have carved out.
Because of this, we will enter a new phase of productivity over the coming months, in which businesses begin to confidently implement tokenized assets. Forward-thinking devs will also look at ways in which they can innovate on the foundations already in place.
It is these new influences that will push acceptance forwards towards the slope of enlightenment, and create the conditions for tokenization to start coming of age in 2019.