According to a report produced by a Bank of Canada staffer, ‎most of the ‎advertised advantages of the blockchain ‎technology actually come from ‎more-conventional ‎technologies such as encryption and smart contracts.‎

The research paper, which the BoC says it solely represents the views of its ‎writer, noted ‎that there is no consensus on “what benefits the blockchain may bring or on ‎how it may fail.” It claims that a ‎careful look into the distributed ledgers, which were ‎inconceivable just a couple ‎of years ago, finds that most of the proposed ‎benefits of blockchain do not really come ‎from “elements unique to ‎blockchain.”

‎In addition, the author Hanna Halaburda suggested that the excitement ‎surrounding blockchain-enabled applications would benefit ‎more from a ‎distributed database designed differently than the technology that has been ‎at ‎the heart of the surge in cryptocurrencies. ‎

At the time where blockchain inches closer to its entrance across several industries, ‎the analytical paper ‎recommends the technology-referencing startups to temper ‎their expectations regarding the ‎returns they will see on initial applications.‎

Understanding Blockchain, Away from the Hype

Obviously, the main deficiency of this report is that it presents the blockchain ‎technology ‎merely as a ledger or some database. Despite being true, this is ‎restrictive and does not do it ‎justice, as the technology’s substantive disruption is much ‎more than that. ‎

In other words, the research has not totally figured out all of the details of the ‎inner workings ‎of the blockchain networks. Describing blockchain as a ‎paradigm shift ‎and game-changer could be more meaningful, and it gives a better ‎idea of its true ‎potential.‎

This recommendation, which Canada’s central bank says it may differ from its own approach, also contrasts to the large-scale adoption ‎of the ‎emerging technology ‎among Canadian institutions.

Canada is seen as a ripe ground for ‎‎blockchain technology applications, including ‎cryptocurrencies, partially thanks ‎to its ‎tech-savvy population. ‎The subcontinent is also ripe for an institutional-level ‎‎adoption as the ‎country’s investors may soon get access to ‎the burgeoning market through ‎exchange-listed products ‎that track the price ‎performance of bitcoin‏.‏ ‎

What’s more, blockchain enthusiasts will argue that the world is basically witnessing the ‎‎creation of a whole new ecosystem that establishes fresh paradigms for digitalised and decentralised ‎economies. But one of the ‎great challenges of such a transformation is that it is not a ‎one-time game. The widespread emergence ‎of blockchain will take some ‎time because its fundamental concepts are still being tested ‎in various use cases.‎

In addition, a seemingly endless stream of blockchain companies ‎have been ‎founded in recent months. This can’t go to waste. And most stunningly, ‎‎governments and central banks around the world are ‎paying attention and ‎have already started countless blockchain ‎initiatives. ‎

Finally, lots of people, including the author of this paper, compare ‎the blockchain ‎hype to the dotcom bubble. But spelling out the ‎parallels between the ‎development of crypto and historic price bubble ignores the fact that ‎blockchain technology is not limited to cryptocurrencies.‎