LONDON (Reuters) – Commodity firms and banks have been diving into blockchain pilot schemes over the last two years but the new technology’s application for most trading has likely been over-hyped, a report by Boston Consulting Group (BCG) said. Blockchain, originally the platform behind cryptocurrency Bitcoin, is viewed by some as a solution to inefficiencies, improving transparency and reducing to the risk of fraud.

But BCG believes its potential has been exaggerated. A high-tech ledger, blockchain uses a shared database that updates in real-time and can process and settle transactions in minutes without the need for third-party verification.

The volume of trades through various schemes has been negligible so far and it is too early to tell how soon it might reach a critical mass. Among the obstacles to scaling up the technology include reconciling terminologies and whether the switch to a blockchain platform is even financially justifiable.

“The industry is very old and everyone uses a different language. How do you define quality, shipment schedules Read more from reuters.com…

thumbnail courtesy of reuters.com