Current Barriers to Blockchain Adoption
Blockchain technology is one of the most important technology trends that gained the most introductory buzz in 2020. It is a technology that seemed like it’d have changed the world immediately yet it seems like it is on a slow journey. A blockchain is a digital log of transactions that is duplicated and distributed across the blockchain’s complete network of computer systems. Each block in the chain contains several transactions, and each time a new transaction takes place on the blockchain, a record of that transaction is added to the ledger of each participant. Distributed Ledger Technology is a decentralized database that is administered by various people (DLT).
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What does this mean for you?
This means that if a single block in a chain is modified, it will be immediately clear that the chain has been tampered with. This is a sure way to prevent insecurity on the public ledger data. To experience a security breach, hackers would have to change every block in the chain, across all distributed versions of the chain, if they intended to destroy a blockchain system which is almost very difficult and mostly impossible
Blockchains like Bitcoin and Ethereum are constantly growing as new blocks are added to the chain per second, increasing the security of the ledger dramatically.
This technology has been around for nearly a decade. It has taken centre stage around the world in recent times. There are numerous news pieces describing how it will transform the digital world and beyond. So are intelligent speculations on blockchain’s immense potential. Global Blockchain conferences and meet-ups have proliferated, with investors flocking to startups with even the flimsiest ties to the technology.
Blockchain technology is now surrounded by a lot of buzzes. It is based on the notion that both public and private blockchains can automatically address the flaws in our current systems.
The Current State Of Blockchain Adoption?
According to a 2017 Harvard Business Review, “virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies”. Yet the practical adoption of this technology has proven to be much slower than all the publicity would have suggested. Maybe politics and economics really don’t play the same way.
Despite all of the fanfare around blockchain, the practical adoption of its technology has been much slower than expected. It’s past time to ponder why. The primary impediment to blockchain adoption is a lack of understanding of the technology. Many businesses avoid implementing technology because they lack adequate expertise about how to do it.
For everyone, blockchain is uncharted ground, and many people’s apprehension about putting their trust in the system contributes significantly to the technology’s slow adoption. Most people are afraid of the unknown.
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What barriers exist so far?
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Many companies can only connect with cryptocurrency management. These companies tend to steer clear of this technology to avoid extra costs. Blockchain technology is relatively new and so it has very few experts with very high charges. Blockchain has an issue with its image. In the minds of many, blockchain is too closely associated with cryptocurrency. Crypto, in particular, has a bad reputation since it is associated with fraudsters and hackers who use the technology for illegal purposes. This bad rep reflects poorly on the blockchain technology system as a whole, making individuals reconsider their decision to use it.
Another reason could be that it is difficult to explain to authorities how data is exchanged across blockchain participants, making financial institutions and banks hesitant to utilize blockchain.
Financial institution stakeholders like banks and insurance are all more conventional industries due to their high fiduciary responsibilities. They must essentially be conventional. Regulators in these businesses are also more risk conservative, and regulatory frameworks in many nations are many years behind.
Existing regulations are by far the most important roadblock for blockchain innovators, as they “favour incumbents and their entrenched interests over disruptors.” The process of digitization is taking place in a “regulatory-heavy” zone. Given governments’ long-standing authority to safeguard consumer and property rights, which is not surprising.
When it comes to the blockchain, privacy is still another issue. One of the most powerful features of blockchain technology, and particularly public blockchain networks, is the transparency that comes with having a public and easily verifiable record of a network’s transaction history. This isn’t always viewed as a good thing, as it can jeopardize the privacy of organizations or the general public who use it. Many businesses that deal with personal information must adhere to strict guidelines. As a result, businesses that wish to secure their trade secrets and other sensitive data are hesitant to use some of the most popular blockchain technologies.
Summary
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Irrespective of all the blockchain adoption challenges existing today, it seems inevitable that companies should follow it closely and be ready to adjust their services and get the results required.
As the technology progresses, we will see bigger and better use cases with the technology. Blockchain holds the power to do the following and more:
Disrupt our current financial system (DEFI)
Transform interbank payments (SMART CONTRACTS)
Provide opportunities to improve existing mechanisms for exchange (NFT).
Preserve financial information, customer records, and trade agreements
With so many barriers that prevent blockchain adoption. One has to intentionally look for a purpose that blockchain can surely provide. Blockchain has to increase trust, security, transparency, and the traceability of data shared across a business network.
It is safe to say that most of the barriers will likely be solved with time as the technology onboards more users.
