Blockchains are capable of a lot.

They’re good for tracking pork chops. They can help put a stop to the spread of conflict diamonds. With blockchains, doctors can better track patient data, freeing them up to actually see their patients instead of fiddling with all that paperwork. Refugees who don’t have access to basic health and financial services because they don’t have paper proof of existence may be able to get “official” digital identities, thanks to blockchains.

But financial services doesn’t have any such imperatives forcing it to dedicate millions of dollars in research, talent and venture investments in blockchain technology. For this industry it’s really just advanced database technology. It may help it save money – but it’s not a revolution.

“Really [blockchain companies are] building a feature, and I think this is what people have got to understand,” said Jamie Burke, CEO of Outlier Ventures, a research group for blockchain use cases. “The best outcome is it’s bought by an incumbent and it’s just going to become a feature of that incumbent, and that’s fine. I don’t think you’re going to be building the next SAP – as much as everyone thinks that’s going to happen I just don’t see that happening.”

Incidentally, SAP, the software and IT firm, has just partnered with Everledger, a blockchain company that tracks the provenance of diamonds, to build blockchain capabilities into its business network. It also joined the Hyperledger blockchain community.

Let’s start from the beginning

Broadly speaking, a blockchain is a shared ledger that’s maintained and verified by the participants of its network – two different financial institutions, for example – and doesn’t rely on any one party to manage it. It is updated almost immediately when new information – like details of a financial transaction – is added. It’s different from other database technology in that the ledger is completely immutable; the information on it can’t be tampered with or edited. (For the purposes of this article, “blockchain” is shorthand for “distributed ledger technology.” This is not an argument about semantics.)

When using the R word it’s important to remember that it is incredibly difficult to “disrupt” industries as highly scrutinized as financial services. New technology needs to integrate with old systems and interfaces – those don’t get replaced overnight. It’s also the kind of technology that’s most effective when there’s a network effect and currently, most organizations are still exploring why they actually “need” blockchains and which iteration of the technology is going to work best for them.

Outlier, which serves as a startup incubator and accelerator, has met 1,220 blockchain startups in the last four years (that’s almost one per day). AngelList alone lists 543 blockchain startups and 739 blockchain investors. Venture Scanner is tracking 882 bitcoin and blockchain companies across 73 countries. Digital Currency Group is invested in at least 80 blockchain companies.

According to Burke, 99 percent of them are overhyped.

“If 90 percent of everyday startups fail in their first three years, 99 percent in blockchain may very well be close to actuality,” he wrote this week. “If you apply the math to the 1,220 startups in our tracker that’s 12 that will ‘succeed’ in line with my definition of sustainable.”

How did we get here?

Industry participants like to point to the evolution of blockchain from the tech underpinning bitcoin to something that would revolutionize finance.

In 2014 bitcoin dominated the headlines with its various associations with hackers and money laundering. Banks scoffed at it. In 2015 they learned about the technology, in 2016 they all ran proofs of concept using blockchain technology for various financial applications. Their minds changed so quickly and momentum has been strong. This year is often touted as the year banks will begin actually using blockchain technology, which IBM’s predicted in September (IBM actually launched its commercial blockchain Fabric last Monday).

IBM has been working with Hyperledger building a general purpose blockchain, where all details of a trade are shared with all members of the network. It has one of the largest networks of major bank partners but has many more outside of the banking industry.

R3 CEV, Hyperledger’s competitor, is using the technology to build something completely different: a platform called Corda mean specifically to record and manage financial agreements between regulated financial institutions.

“We identified that the technology is highly relevant to a huge bunch of problems in finance,” Richard Gendal Brown, R3’s head of technology and a former IBM veteran of more than 20 years, said of Corda. “It doesn’t follow that the technology that created this wave of hype can be used directly and unchanged – that the technology which was designed to solve problems not in finance is the solution to these problems we’ve identified in finance.”

What’s truly revolutionary about the technology is kind of mundane, Brown said. For the first time, parties who don’t fully trust each other can share information on a system that allows each of them to know they’re in consensus with each other. However, it doesn’t matter for financial services if people don’t have appropriate ways to apply it there.

“They’re the two problems you have to address – what, if anything is new here, and can we define its relevance to financial institutions?” he said. “That stands in contrast to an approach that would say, ‘blockchains are cool, let’s go find opportunities to apply them.’ In that way lies madness.”

Technology is maturing, but has not reached maturity

Late last year R3 suffered one of its minor PR blows when two of its founding member, Goldman Sachs and Santander, dropped out of the consortium. Goldman has not commented on that decision although rumors say it opposed R3’s investment framework, which initially would have allowed it to retain a 10 percent stake with the investors splitting the remaining 90 percent. When R3 said it would cut that to 60 percent for bank members, Goldman pulled. Santander said it decided to take its blockchain focus in a different direction, one more geared at cross border payments and smart contracts, instead of trade processing.

Julio Faura, head of R&D for innovation initiatives at Santander, still maintains that blockchain technology has the potential to revolutionize payments but admits it’s not clear when or how.

“The past year has been a great improvement but [blockchain] still needs to mature even more before we can really think about doing real-production ready applications with blockchain,” he said. “I do think it has the potential to have a revolution. It will take time, we have to be quite pragmatic and driven here.”

Santander is involved in Utility Settlement Coin, a blockchain project co-launched with three other banks to create a blockchain-based clearing and settlement system; the Global Payments Steering Group, a standards-setting group formed with five other banks for the use Ripple’s technology (in which Santander is also an investor).

Everything comes back to data, and maybe AI

For Faura, the proliferation of mobile devices presented an opportunity to change payments based on new sources of data. Overhauling old technology systems is just as much, if not more, about organization and personnel management as it is about the actual technology, he said.

“There’s an opportunity for us and for any other company to use that data widely to get to know our customers better and give them better services at competitive prices,” Faura said. “[Blockchain] is a technological breakthrough but… you need people to embrace the use of data analytics to complement their knowledge and experience, so they make better and more informed decisions.”

Burke called blockchain the “trojan horse” that’s incentivizing financial services to standardize its data in such a way that it might be able to apply artificial intelligence to it to make the market more effective and efficient.

“You’ll see more truly innovative stuff happening with blockchain technologies in emerging or developing markets because there is no infrastructure there,” Burke said. “This stuff will become that infrastructure much in the same way mobile banking leapfrogged conventional banking in Africa or India, where they didn’t even bother building websites, they just started building things with mobile technology. The reality is that where the technology is, people can’t build it at scale or build it securely.”