The rise and fall of the initial coin offering (ICO) industry and volatility in the bitcoin market have both stimulated interest and created fear in the practical applications of blockchain, Michael Fay, a vice president of US-based Akamai Technologies, told MEED.

“As with any new technology, the hype cycle can be distracting,” he said, while stressing that companies considering updated data sets and databases for 2020 will likely need to consider a distributed ledger, one of the four material components that make up blockchain technology.

Fay says Akamai considers smart contracts, cryptocurrencies such as bitcoin, and utility tokens as the other blockchain technology components.

MEED understands Akamai had written its own distributed ledger code inclusive of consensus algorithm, which Japan’s Mitsubishi UFJ Financial Group recently implemented for its new blockchain service.

The service, says Fay, is now the “world’s most scalable and fastest payment processing platform,” with a capacity to process a million transactions per second and the ability to finalise transactions in under two seconds.

The speed plus cost savings of approximately 2 to 3 per cent per transaction, the rate payment platforms like Visa and Mastercard charge banks, is a major incentive for considering a blockchain service, the executive says.

“Akamai sees this solution... solving problems in segments where transaction volume and speed are paramount,” Fay says.

In addition to finance and exchanges, supply chains, healthcare, advertising and fraud detection, governments are expected to benefit from blockchain services.

Fay says Akamai sees the Middle East as a leader in innovation “evidenced by smart government initiatives and their appetite to adopt new technologies before most other countries.”

The UAE government aims to become a global leader in the adoption of blockchain technology by 2021.