Blockchain is the distributed ledger technology that regulates cryptocurrencies, and its benefits are increasing through many industries. Yet, despite all of the major benefits of blockchain, there are still numerous barriers to mass adoption.
Restricted internal barriers
Many businesses are still working on evaluating the technology’s feasibility or comparing different blockchains, instead of focusing on actually developing practical ways it could be put into practice to improve business operations. Companies are experimenting with private (permission) blockchain models rather than open (public) blockchains. This is due to public blockchains being seen as a bigger data security risk.
Lack of understanding
Misunderstanding and a lack of general knowledge of the technology and its capabilities form some of the most compelling barriers to blockchain technology adoption. Many organisations don’t fully understand what blockchain is or what it can do.
However, even if people learn more and become more knowledgeable, the issue might arise in which companies become resistant to changing existing systems because of the cost and time. This then causes a whole new barrier within itself. What companies need to understand is that the benefits of blockchain greatly outweigh the costs. Therefore, if they want to stay modern and up to date with new technologies, they need to be able to justify the costs.
Difficult to use
Blockchain technology is still very hard to use for some, with most people needing to learn the skills and knowledge before they go on to use and implement it. A user must know how public and private keys work as well as have an understanding of all the blockchain platforms.
Developers face many challenges, including knowing how and being able to build on top of blockchain technology. They also need the tools to be able to build better software with the help of blockchain. The key is to be able to use many blockchains, not just one. This means the future is not a single solution, but many blockchains and many solutions all addressing similar issues.
Although barriers to adoption are gradually decreasing, “for most enterprises, obstacles have kept the value of blockchain more perspective than actual, and commercial adoption thus far remains limited.”
“Because of its relatively poor performance, many observers do not consider blockchain technology to be viable for large-scale applications,” says Deloitte.
To resolve this issue, developers are creating new consensus mechanisms. A consensus is how participants in a blockchain network agree a transaction recorded on the blockchain is valid. In this regard, blockchain developers are exploring newer consensus mechanisms, such as proof of burn, proof of capacity, and proof of elapsed time.
Cognizant surveyed over 1,500 European business decision-makers across the banking and financial services, manufacturing, retail, healthcare, and insurance industries, and there seems to be a reluctance to collaborate with other businesses on blockchain development, meaning it may take longer than necessary to make blockchain mainstream. The vast majority of European firms intend to develop their own modelling techniques, with only 2% planning to join a consortium of start-ups and competitors.
In conclusion, a greater awareness of the blockchain technology is imperative. It has already proven to have a sizable benefit to all major industries. It is now time the adoption of blockchain becomes mainstream.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.