Blockchain is a technology that will transform everything from the finance industry to global supply chains, and the companies that build it will get very rich. But not all of them.
According to Arvind Krishna, director of research at IBM, 90% of the firms now building blockchain—a new type of record-keeping software—will tumble into the “chasm of death,” and vanish before the technology goes mainstream.
Speaking to Fortune after an appearance on Monday at Consensus, a major blockchain conference in New York, Krishna shared his thoughts on the “chasm.” The term (along with “valley of death“) is a popular metaphor that tech investors use to describe the fateful period when early innovators have embraced a technology, but before it starts to go mainstream. During this time, many companies run out of cash and die.
In the case of blockchain, Krishna predicts the chasm will claim companies trying to introduce new protocols. These protocols serve as a base layer or operating system for blockchain, and Krishna says the existing options—including Hyperledger, Ethereum and the bitcoin protocol—are already too entrenched for a new entrant to displace.