Feb 1, 2021 - Economy & Business

IBM cuts back on blockchain

Illustration of encryption as an abstract eye made up of symbols and code

Illustration: Rebecca Zisser/Axios

IBM has greatly scaled back its blockchain unit, sources tell CoinDesk’s Ian Allison.

Why it matters: There is perhaps no more visible a champion of “enterprise blockchain” than IBM. A company that once trotted out a slate of TV commercials on the promise of more efficient supply chains has now cut up to 90% of its blockchain headcount.

Driving the news: "Blockchain, not bitcoin" seems to have aged poorly. While cryptocurrencies have surged in value in recent months, big-business attempts to put blockchain technology to work have been stricken by COVID-related cutbacks and anemic adoption.

  • Overall, Big Blue recently announced another year of declining revenues in 2020, with numbers worse than analysts expected.
  • Regarding the reported blockchain cuts, an IBM spokeswoman told CoinDesk, "We have shifted some resources but remain committed to the technology, blockchain ecosystem and services."

The big picture: There's a wide spectrum of attempts to apply blockchain technology to industry uses, with companies like R3 on one end running tightly controlled shared databases, and other players like ConsenSys and EY building on Ethereum's public chain, which is itself broadly used and relevant, per Allison.

  • But the challenges are cropping up in the middle, where IBM and others are trying to build tech that fuses some elements of both public and private blockchains.
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