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Is blockchain a solution for smoother payments?

Total reliance on the technology could cause harm to the industry, says expert

| | Mar 14, 2018 | 10:50 am
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Dubai, UAE, 14 March 2018: With blockchain technology making inroads, one has to exercise caution before adopting the technology as a model for smoother payment processes in the construction industry, said Nick Jones, Vice President and Distinguished Analyst, Gartner.

Sharing his thoughts on the subject, Jones said: “If the construction industry is looking at blockchain as a tool for smoother payment processes, then my instant reaction would be to exercise caution, mainly because the immaturity of the technology is a huge worry. It is a new technology, and invariably things can go wrong, and there are other complexities.”

Jones added, “Blockchain, by its nature, is a distributed shared ledger between parties who do not know each other, and it does not bring much to the table, and in some cases, it can be an overkill.”

Jones believes the construction community could fix the payment process problem by correcting current internal business practices and adopting better ethics, supported by governments, which could bring in regulations to protect all stakeholders of the industry, instead of relying entirely on blockchain as a tool for smooth payment processes. “Total reliance on the technology could cause harm to the industry,” he said.

Elaborating on the challenges of the technology, Jones added: “The problem with blockchain is that nobody owns or manages it, so if something goes wrong, there is nobody who can fix it. I do sometimes see blockchain as a hammer looking for a nail, and this might be one of those cases.”

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