In Brief

The Hype

We’ve all heard that blockchain will revolutionize business, but it’s going to take a lot longer than many people claim.

The Reason

Like TCP/IP (on which the internet was built), blockchain is a foundational technology that will require broad coordination. The level of complexity—technological, regulatory, and social—will be unprecedented.

The Truth

The adoption of TCP/IP suggests blockchain will follow a fairly predictable path. While the journey will take years, it’s not too early for businesses to start planning.

Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economy’s digital transformation. They’re like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

A version of this article appeared in the January–February 2017 issue of Harvard Business Review.