Can IBM Really Make a Business Out of Blockchain?

You can mark 2016 as the year “blockchain” became a buzzword. It’s not as hollow as “cloud,” which marketers have rendered almost meaningless. But “blockchain” is now at the point where everyone and their dogs want a piece of it. One of the loudest evangelists is IBM, which has been touting the potential of blockchain—a technology that can allow companies to create quick, tamper-proof ledgers—to transform everything from finance to trading to insurance.

On Tuesday, IBM announced the formal launch of a so-called “Bluemix Garage” in New York, where developers can experiment with financial-tech software and explore new forms of blockchain innovation. It’s a fine idea and one that could serve IBM’s long-term strategic interests. Namely, if developers flock to IBM’s platform, the company will be well-positioned to grab a big share of the “blockchain-as-a-service” market—a still nascent industry dedicated to helping firms navigate the world of ledgers, smart contracts, and all that other good stuff.

The big question, though, is whether IBM can pull this off. While the company can build it, there’s no guarantee they—in this case, the developers and the customers—will come. The challenge is that blockchain technology involves some pretty esoteric software, and those who understand are already in high demand. Outfits like Bloq, for instance, which is run by a former bitcoin developer, are already advising big banks on how to implement blockchain solutions...