At the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
IBM and Maersk Discontinue TradeLens in Hit to Mainstream Blockchain Adoption
Source: shutterstock.com/LCV
Since its inception, blockchain has faced an uphill battle in finding widespread adoption. Skeptics have a number of concerns with the technology, but one of the most popular are the use cases. What concrete benefit does blockchain give people? IBM (SNEEZE:IBM) and AP Møller – Maersk (OTCMKTS:AMKBY) attempted to answer this question five years ago. But with the pair winding down the TradeLens project, blockchain stalwarts have yet another setback to overcome if they want to see mainstream adoption.
Much of the blockchain industry today is full of products that are not practical. The technology is used almost exclusively for cryptocurrency exchanges, minting non-fungible tokens (NFTs) and media platforms that still pale in comparison to their non-blockchain competitors. This minimal ecosystem has been satisfying for the legions of crypto investors who use them. However, it leaves much to be desired among doubters. Is technology really worth our time if this is all it’s good for?
Freight transport giant Maersk and technology company IBM teamed up to prove the power of blockchain for the real world. Five years ago, the two announced a collaboration called TradeLens. The project sought to bridge the gap between blockchain and the supply chain, allowing goods to be tracked more accurately and easily from departure to destination by logging data on a permanent, easily accessible digital ledger.
TradeLens promised to fundamentally change the way goods are shipped around the world. In doing so, it sought to bridge the myriad of businesses involved in the shipping process, from shippers to ocean carriers to customs brokers and governments themselves. However, getting all these moving parts to work together has proven to be quite difficult. Now, that’s causing the two companies to discontinue TradeLens altogether.
IBM and Maersk Ditch TradeLens
When IBM and Maersk started TradeLens, the crypto market was not nearly as big as it is now. As such, blockchain technology was even more niche and unknown to the general public. Now, five years later, the product is on its way out, setting back widespread blockchain adoption once again.
A statement from Maersk Head of Business Platforms Rotem Hershko earlier this week confirmed the end of TradeLens. Hershko says that starting today and until early 2023, the companies will wind down their support for the blockchain effort. When explaining the reason for this decision, Hershko blamed a lack of cooperation between partners:
“While we have developed a viable platform, the need for full global industry collaboration has not been achieved […] TradeLens has not reached the level of commercial viability necessary to continue its work and meet its financial expectations as an independent business.”
For years, critics have criticized blockchain for a lack of viable use cases. And while the TradeLens project has received praise from those same critics as a step in the right direction for widespread use, the death of the service is yet another roadblock preventing large enterprises from switching to permanent, containerized digital ledgers. Furthermore, the move highlights challenges that are increasing for even the most successful blockchain projects in getting customers to cooperate on the integration of blockchain technology.
