If you’re looking for a one-word summary of corporate blockchain efforts in 2019, try “experimentation.” The hype is subsiding and more businesses are actively trying to figure out how they can actually use the technology to their benefit.

“2019 has continued what 2018 started – enterprises experimenting,” says George Spasov, blockchain architect and co-founder at LimeChain. “The finger-dipping exercises of the last year have encouraged further experimentation this year, while dragging along new experimenters.”Blockchain experiments struggled to move from proof-of-concept to production in 2019, but now the tech is maturing.

Trading in hype for tangible results is always good news from an IT leadership perspective. But Spasov has some “bad” news, too: These experiments have struggled to move from proof-of-concept to production. It’s not actually that grim a report, though, because the challenge isn’t a lack of viable use cases. Rather, it’s a largely technical issue, and that is easier to solve.

“While in 2018 the proof-of-concepts were failing due to lack of product-market-fit, this year struggles with adoption are due to [a] much more fixable reason: technological immaturity,” Spasov says. “In 2019, we’ve seen proof-of-concepts being defined to address key areas in various businesses. From financial use-cases and asset tokenization to transparency and traceability of the supply chain, the technology promises to add significant value.”

Clearing the technology hurdles standing in the way of value will likely be one of the key blockchain stories in the year ahead. Let’s take a closer look at that and other important trends IT and business leaders should be aware of in 2020:

1. Blockchain “tourism” gives way to serious projects

As Spasov notes above, most companies have been merely testing the blockchain waters; that fits with some earlier data points, circa late 2018, that indicated most CIOs weren’t actively pursuing blockchain projects. A year later, more recent research suggests that’s changing.

“From an enterprise perspective, the ‘blockchain tourism’ phase has passed and companies are beyond [simply] feeling the need to understand the underlying the technology details,” says Chris Broderson, Deloitte Americas Blockchain Lab lead.Deloitte 2019 Global Blockchain Survey: Roughly 50% of respondents expected to spend, on average, $5 million or more on 2019 blockchain projects.

Broderson notes that according to the Deloitte 2019 Global Blockchain Survey, executives say they’re expecting common barriers to blockchain adoption – such as security threats, implementation headaches, or regulatory issues – to decrease significantly.

“What has emerged is a shared recognition that blockchain is real and that it can serve as a pragmatic solution to business challenges across industries and use cases,” Broderson says. Roughly half of the organizations included in the survey said they expected to spend, on average, $5 million or more on blockchain projects in 2019. That fits with another number: 53 percent of the survey’s respondents said blockchain was one of their top five strategic priorities this year, up from 43 percent in 2018.

2. Adoption grows as proof-of-concepts become MVPs

Expect that to generate momentum heading into next year, when even some skeptics begin to revisit the technology’s potential uses.

“Blockchain appears to be entering a new era of wider, more practical adoption,” Broderson says.

Spasov expects this to take the form of a more visible transition from experimentation to actual production use – not because some blockchain revolution is going to take place, but because the companies that have been running proof-of-concepts will begin to take a minimum viable product (MVP) approach to running an application in production.

“While on the surface, not much has changed in 2019, the internal improvements made by the major distributed ledger technology (DLT) technology groups have increased the potential to address real-world issues significantly,” Spasov explains. “It is a matter of time that the experimenters start utilizing the new advancements and finally hop the hurdle between POC and MVP. It is quite likely that this will happen in 2020.”Also look for “blockchain-inspired” systems that borrow key concepts to solve business problems.

Broderson notes an overlapping trend: The research and experimentation companies have been doing might also lead to the growth of “blockchain-inspired” systems that, while they won’t meet a purist’s definition of a blockchain, will borrow key concepts to solve business problems. He points to transactional functions that can be heavily fragmented, such as trade finance, cross-border payments, digital certifications, and supply chain optimization.

“Blockchain has led many to rethink a number of business processes that could be transformed not by blockchain but also ‘blockchain-inspired’ solutions to solve many of today’s data-sharing challenges, such as reconciliation and data processing. In other words, the genie is out of the bottle and in 2020 there are likely to be a number of blockchain or blockchain-inspired solutions launched, creating new ecosystems at scale.”

3. Blockchain platforms continue to adapt and evolve

Technology maturity will be one of the biggest catalysts of growing adoption, and Spasov notes an outcome of the experimentation phase: Key ecosystems are adapting their platforms based on lessons learned to this point and on the needs of actual businesses.

“The two major enterprise DLT technology groups – Hyperledger Foundation and Enterprise Ethereum Alliance – have heard the screams of the failing experiments and have taken steps to address their pains,” Spasov says.Case in point: The addition of “private data” in Hyperledger Fabric earlier this year.

As an example, Spasov points to the addition of the “private data” concept in Hyperledger Fabric earlier this year. Here’s a case where a blockchain ideal – completely transparent transactions – doesn’t always mesh with the realities of running a for-profit business, which in turn hinders adoption. This evolution could help address that conflict.

“While in theory, the idea for a fully transparent system seems incredibly powerful, it is also a utopian one,” Spasov says. “In the real world, trade secrets generate profit. Very few companies will ever be able to operate in fully transparent mode without losing their edge.”

A lack of interoperability – between blockchain platforms themselves and between blockchain platforms and existing systems – is another example. (More on that in a moment.)

“Both [issues] have been recognized by the major blockchain platforms and the necessary steps to address them are already underway,” Spasov says. He expects this to continue apace in the year ahead: “Continuing the trend from 2019, they will continue learning what the business needs and will further adapt their platforms to address key adoption problems.”

4. Integration and interoperability becomes a bigger deal

Data protection and privacy is one of the biggest hurdles to enterprise adoption. Interoperability and integration – or a lack thereof – is the other, according to Spasov. That includes interoperability and integration between ecosystems like Hyperledger and EEA, as well as public blockchains.

Spasov points to an integration-in-progress between Hedera Hashgraph and Hyperledger Fabric – “allowing [enterprises] to take the best of both worlds,” he says – as an example of this trend. Hedera became a Hyperledger general member earlier this year.

This trend should help alleviate the legitimate concern among some IT leaders about placing too big a bet on a single vendor or platform. But it’s also about piercing what Spasov refers to as the blockchain “bubble” – meaning that blockchain proponents have had to come to terms with the reality that if blockchain technology is ever to gain a serious toehold in most companies, it will have to be able to coexist and integrate with existing systems.Users want integration with existing ERP and CRM systems.

“Think of your ERPs, CRMs, etc.,” Spasov says. “The DLT technology still lacks the developed components to integrate and interoperate with these existing systems. This puts a burden on the users to use two systems side-by-side – something that historically has been the downfall of many software [projects]. Naturally, busy users rarely used the DLT experiments.”

Spasov expects this to change in 2020, as the efforts of key stakeholders to solve this problem begin to pay off. Spasov isn’t alone.

“Up until this point, blockchain has mostly been discussed as an application in and of itself. This has in part contributed to the hype culture surrounding the technology, as some want to see blockchain-powered applications take on and replace legacy applications – which may or may not happen,” says Nikao Yang, COO at Lucidity. “More realistically, I expect blockchain to be integrated into more existing applications to serve tracking, auditing, and recording functions at a higher degree of efficiency than what we can do with existing technology today.”

Yang points to supply chains in the food and automotive industries as high-ceiling examples of where this type of integration between blockchain and existing systems is likely to generate significant results.

5. Adoption success will favor the tortoise over the hare

An overlapping 2020 theme for blockchain in 2020: Slow, steady progress. If you’re looking for an avalanche of adoption or disruption, or for quick-and-easy wins, you’re probably looking in the wrong place.Honeywell’s GoDirect Trade, an online marketplace for used aerospace parts, built trust using blockchain.

Instead, you’ll see the growth of blockchain solutions for actual business problems. Consider Honeywell’s GoDirect Trade, an online marketplace for used aerospace parts. That might seem mundane in more ways than one, but this is a multi-billion-dollar market, and completing a transaction is far more complicated than using a credit card or PayPal.

“What’s incredibly interesting about this industry is that $4 billion changes hands per year and almost none of the transactions are done online – in fact, it takes an average of two phone calls and four emails just to close on one of these used-part deals,” says Lisa Butters, general manager for GoDirect Trade.

Let’s underline this: In 2019, this is a $4 billion industry that has remained largely offline. And Butters says issues like customer experience or convincing sellers to go digital were merely table stakes.

“Instead, it all boiled down to one thing: trust,” Butters continues. “Unless we could find a way to manufacture trust between a buyer and a seller, there was no way we’d be able to open the floodgates on online transactions. Hence, the reason why we turned to blockchain.”

It’s still early days, but this is a good example of translating hype – a blockchain is not inherently secure, for example, though some buzz might lead you to think so – to practical application. That principle will be a market driver going forward across industries.

“We are seeing an increasing demand of users who want to be in control of their data with strong consent and protection model,” says Greg Wolfond, CEO of SecureKey, whose Verified.Me app is built on the IBM Blockchain Platform, which is based on Hyperledger Fabric. “The privacy and security that well-implemented blockchain solutions can provide also comes with other benefits users appreciate, such as convenience and time savings.”

Meanwhile, obstacles to blockchain adoption might be diminishing, but they’re certainly not disappearing. Wolfond says that a lack of overall understanding about blockchain will continue to be an issue, as will a lack of technical skills, among other challenges.

There’s another trap worth minding, too: Even as the blockchain buzz subsides, there’s still the potential for chasing the crowd in lieu of pursuing an actual business goal. According to Broderson, increasing corporate interest in blockchain will require IT leaders to ask not only “can we use blockchain here?” but “should we use blockchain here?”

“The largest potential blockchain pitfall is enterprises focusing on the hype created by blockchain enthusiasm and rushing into projects driven by fear of missing out, rather than having rational conversations of blockchain’s fit and purpose,” says Deloitte’s Broderson.