COVID-19 popularized decentralization, but blockchain may not catch on

Published on by Cointele | Published on

On Nov. 9, drugmaker Pfizer announced that its COVID-19 vaccine is 90-plus percent effective, and even though it may be premature to proclaim the pandemic's end - as the virus continues to rage in the United States and Europe - once can at least speculate: Where will blockchain adoption stand when the crisis abates?

"The virus has revealed the weaknesses in our supply chains, our inability to deploy resources where they are most needed to address the pandemic. Blockchain solutions that have been under development for years have been repurposed and unleashed to address these challenges." Will decentralization go on?

"This trend will continue after the pandemic," Philipp Sandner, head of the Frankfurt School Blockchain Center at the Frankfurt School of Finance & Management, told Cointelegraph, adding: "The present pandemic situation has shown us how valuable and efficient decentralization can be - allowing us to increase our resilience to unforeseen events while at the same time often improving operational efficiency."

Back in April, Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon University's Tepper School of Business, told Cointelegraph that the pandemic had driven home some hard lessons, mainly that dependency is a weakness: "We will need a more robust economy - one where supply chains are less dependent on a single producer, where workers are less dependent on the operations of a single firm, where individuals are less dependent on a single source of health care." In short, a more decentralized world economy was required, and blockchain technology seemed uniquely poised to play a role.

"To the extent that blockchain offers one way to achieve this diversification, by decentralizing enforcement of a shared database or ledger, I remain optimistic that it will play a role in the economy going forward."

In his recent book The Pandemic Information Gap: The Brutal Economics of COVID-19, Joshua Gans, professor of strategic management at the University of Toronto, argues that blockchain technology could be used to verify whether people have been tested for infection as well as when or how they have been vaccinated against viruses.

"If there were any lingering doubts over the value of blockchain platforms to improve the transparency of businesses that depend on the seamless integration of disparate networks, COVID-19 has all but wiped them away," wrote Mariam Obaid AlMuhairi, project manager at the Centre for the Fourth Industrial Revolution UAE at the Dubai Future Foundation, in a World Economic Forum blog post in May. She added that the healthcare crisis can be viewed as a learning experience, demonstrating "How to build transparent, inter-operable and connective networks."

In a recent study on commercial uses of blockchain, Halaburda and her colleague Yannis Bakos looked at 150 "Announced" blockchain projects.

Only a small portion of these had been implemented as of March, and of those executed, almost all involved either supply chain management, certification or payments, suggesting the scope of commercial blockchain technology remains narrow.

Still, even if blockchain has disappointed in some areas, like contact tracing, it continues to offer powerful benefits - including transparency, interoperability and immutability - that could bolster supply chains in future crises.