‘Bubbles in the making’ warning amid overhe
Despite its disruptive power to reshape the business world, the much-trumpeted blockchain technology should not be overhyped, warns an industry expert.
“Like any other technology we’re familiar with, blockchain technology is a normal one and should not be played up,” said Alex Kong Hing-yan, founder and chiarman of TNG Fintech Group — a Hong Kong digital wallet operator founded in 2013.
The go-to technology, defined as a decentralized ledger of all transactions across a peer-to-peer network, offers a series of networks of databases that allows information or records to be transferred and updated by participants in a trustworthy, secure and efficient way.
“The craze for blockchain technology, the underlying technology behind bitcoin and other cryptocurrencies, finds its roots in the legendary bull runs for bitcoin in recent years,” Kong told China Daily. “It’s the bitcoin boom that makes blockchain one of the biggest buzzwords in the technology scene.”
The Malaysian entrepreneur believed the market today is showing signs of overheating, with bubbles beginning to take shape.
“In the coming one or two years, the market will progressively wise up to the notion that blockchain is anything but a sexy new term,” he reckoned.
Though the “blockchain fatigue” is beginning to set in among those who feel “its potentials have been over-communicated”, as a report from Deloitte noted, its real-world benefits remain trailblazing. To be sure, the financial services industry has been one of the first movers to test the huge potentials of the game-changing technology.
Such distributed-ledger technology will give traditional financial institutions a leg up to establish more secure and trustworthy systems of credit scoring and KYC (know your customer). It can also be given full play in trade finance, Kong said.
But, in the digital payment industry, where TNG has carved out a name for itself, Kong believed the technology plays virtually no big role in the immediate future.
“The technology itself records and verifies every transaction. Given the sheer number of investors selling and buying bitcoins and the sheer size of trading volumes, it could take 45 minutes or even one hour to get the transaction done,” he noted.
Some digital wallet operators may establish their own private blockchain-based network and facilitate transactions in a realtime manner due to the relatively low trading volumes. However, this is a close-end game where their platforms are disconnected with other players.
For TNG, Kong does not see the “immedi-