Many Companies Involved in Blockchain Failed to Demonstrate Application Scenarios

Many Companies Involved in Blockchain Failed to Demonstrate Application Scenarios

Dec 28th 2018| Investment By:Mars Finance
Since January this year, the Shanghai and Shenzhen stock exchanges have conducted intensive inquiries on some companies involved in the blockchain concept.

As a revolutionary technology after Internet, blockchain is regarded as the core of the next generation of technology due to its features of distributed storage, decentralization and non-tampering, as well as its value of effectively reducing trust cost and accelerating industrial transformation and upgrading. A good portion of listed companies are in the vanguard of exploring the blockchain technology. 

However, it is worth noting that the effectiveness of this exploration is still uncertain. Many industry insiders generally believe that most companies involved in blockchain are still in the early preparing stage, mainly based on concepts and research, and have not entered the implementing level or generated any disruptive apps.

Since January this year, the Shanghai and Shenzhen stock exchanges have conducted intensive inquiries on some companies involved in the blockchain concept, requiring relevant companies to demonstrate the investment, business model progress, profit model, capital reserve, realized income and other aspects related to blockchain and give full warning of risks. Under high pressure, some companies involved in blockchain have to admit that at that time, there was no real research and development activity on blockchain-related technologies and no direct business revenue was generated.

According to Securities Daily, statistics from eastmoney.com shows that a total of 34 listed companies in Shanghai and Shenzhen have been inquired by the exchanges for their blockchain business this year, and only nine of them have been successful in developing blockchain applications. In other words, of the 34 companies questioned, 25 currently failed to demonstrate scenarios for blockchain technology, accounting for up to three-quarters. 17 of the 25 indicate that they are at the initial stage of exploring or researching the blockchain technology. Many companies are suspected of merely driving speculations.

It is difficult for companies to pioneer in a brand new field. But the current blockchain industry is full of bubbles, participants need to be able to see through the puzzle, return to technology and business itself, and create real value for the society.