But both have happened in some shape or form, making the advent of blockchain - now being vaunted as the next game-changer in technology - a lot more realistic than naysayers might initially think.
Dozens of trials and projects are already taking place across a multitude of industries. In commodities alone, blockchain is being used to finance cargoes of oil, track the movement of mangoes from farm to store and detect unused capacity in the shipping industry.
In a survey by Mizuho Bank, there were almost 100 communications for one tractor to move to Australia from Japan - a time-consuming and impractical situation that switched the company onto blockchain.
The technology is being used to track supply chains and ensure that sustainability and corporate social responsibility goals are intact, involving Walmart in food and De Beers in diamonds.
There are plans in various stages of fruition
for minerals such as cobalt
, tin and tantalum produced in the Democratic Republic of the Congo and Rwanda, while the gold market has seen Tradewind Markets launch a supply chain provenance project in cooperation with the several miners and the Royal Canadian Mint.
Meanwhile, blockchain is being explored for post-trade settlement, including by the Australian Securities Exchange, the Depository Trust and Clearing Corp and Hong Kong Exchanges & Clearing, as well as by INTL FCStone’s precious metals division
Trading platforms are springing up based on the technology, including Acquifer Institute
, Crypto Commodity Group
, Open Mineral
and ConsenSys’ Minerac, Metalshub
Savvy observers will not have been surprised that the guest speaker at the London Metal Exchange’s annual dinner in October was Blythe Masters, former global head of commodities at JPMorgan and now chief executive officer of Digital Asset Holdings, a pioneer in the provision of digital ledger technology. Her topic was blockchain.
Trade finance is seeing a huge amount of activity but it’s a sector that could really benefit from some collaborative work.
In excess of 60% of more than 250 banks in over 90 countries surveyed have implemented or are in the process of implementing technology solutions to digitalize their trade finance operations, a survey conducted this year by the International Chamber of Commerce shows.
How close they are to achieving this remains to be seen.
The race to use blockchain has led to a plethora of platforms based on different technologies and running along different sets of rules. Proof of concept trials show that the technology works. Getting it to a place of interoperability, where one blockchain network can talk to another, is still a ways off.
A phrase used repeatedly by blockchain aficiandos is "single source of truth," the holy grail of any platform because it unites data in one place, making it verifiable, secure and easy to access. Again, this requires an element of standardization - and trust - to allow different participants to interact on a level playing field.
Not everyone is on the network either: Warehousing companies, for instance, are the next step with a number now trialing the technology and proof of concepts under way. Last week, Rabobank, Concord Resources and warehousing firm PGS said they were already developing a new blockchain platform
for metal repo financing.
In an ideal world, platforms need to be all inclusive, with trading companies, banks, logistics, shipping and insurance companies, plus customs authorities involved in the process.
Technology needs to continue to move toward a smaller number of providing companies, a process that will likely continue as the decentralized nature of the projects lends itself to working with peers. Progress will need to be made to achieve a more common set of technology standards as well as business processes.
It seems unlikely that there will be a global master network run by one operator on which all participants do business and which works along the same rules in every jurisdiction. Much more likely is that a number of separate digital ledger technology networks will exist but with interoperability, creating a kind of ecosystem with common standards.
Blockchain is undoubtedly set to transform the way institutions do business but it’s just not quite there yet.
But don’t underestimate the pace of change; a year has made an immense difference in the use of blockchain in commodities, and things are likely to be significantly more advanced in another 12 months.