With the discovery of more business use cases for the blockchain, we are getting closer to widespread, industry-led adoption of the blockchain–the technology of the future. But what do we need to get there?
The blockchain is a foundational technology, rather than a disruptive one. It has the potential to transform existing, traditional processes: making them faster, more secure, and more transparent. However, so far the journey toward widespread blockchain adoption has been slow, tortuous, and bumpy.
Top industry leaders like IBM, PayPal, Walmart, FedEx, and Microsoft have already adopted the blockchain into their processes. But most people still regard the technology with some fear and doubt.
Apart from the benefits blockchain has for businesses or organizations that adopt it, the large-scale adoption of blockchain technology would also create more jobs, opportunities, and wealth. Just imagine the number of Web 3.0 engineers, project managers, community admins, and content creators that could be engaged. There would also be more business done because of higher transparency and smart contracts. It would be a win for everyone.
So what’s stopping massive opt-in to the blockchain? And what can be done to change this? Here’s a deep dive into the challenges of adopting the blockchain at scale and how to address those challenges.
Challenges of large-scale blockchain adoption
Insufficient blockchain talent
The blockchain is a relatively novel and complex technology, there are only a few professionals skilled in its use and application. This makes increasing blockchain use and integrating it into existing processes difficult. The few skilled professionals available are in high demand and wouldn’t be able to support increased demand.
Myths and misconception
Many people think cryptocurrency (and by extension, the blockchain) is designed for criminal activities. This idea makes it difficult for people to trust the technology.
Although some reports labelled cryptocurrency as a payment method for scammers and terrorists, data shows that fraudulent payments with cryptocurrency are rare, and most criminals prefer cash.
The blockchain definitely needs to drum up better PR to be adopted across the world. As long as people think it can land them in trouble or be used for illegal acts, it’s virtually dead on arrival.
Cost of new technology
Making new technology available to a large audience is expensive. But more businesses could afford to adopt the blockchain if they understood how it would help them. Because many organizations still need to figure out how useful blockchain could be, they are reluctant to invest in the tech.
Laws, regulations and government support
Blockchain technology is new. Governments, authorities and regulatory bodies are still trying to find the best ways to handle it. The technology can have legal, social, economic, and even security implications. Yet, the regulations for this are just being developed. It is a common saying that innovation precedes regulation, so it is not uncommon for new technology to be ahead of regulation. But while the world awaits regulations that are fully fit for blockchain, adoption suffers.
Addressing the challenges of large scale blockchain adoption
In a recent study on blockchain adoption, researchers highlighted ecosystem readiness as the most important factor for large scale adoption of Blockchain technology. Ecosystem readiness plays a critical role in the adoption of new technology. Ecosystem readiness requires
- Stakeholder involvement
- Advocating for regulatory support
As blockchain technology matures, there is a need for industry-level adoption. This would be pioneered by leaders and stakeholders of the industries most likely to benefit from large-scale blockchain use.
The big players in the tech, finance and digital industries are in the best position to usher in its use and lead its adoption in their ecosystem.
Here are some attributes of ecosystem readiness, and how they can help large scale adoption of the blockchain or any new technology.
The type of industry
For adoption of blockchain technology, companies that are highly technology reliant need to take the lead. Not companies that still run on more traditional, mechanical processes.
Stakeholder trust and collaboration
Large scale adoption requires collaboration, trust and a regulated environment among stakeholders. These stakeholders and executives have to put aside their existing competition and look at the benefits blockchain technology brings to everyone. When there is healthy collaboration and trust, especially among big players, adoption is almost seamless.
Top industry players promoting its use
When big industry players take the lead in innovation, it creates awareness of any new technology being adopted. Throughout the history of technological advancements, big players in the industry were early advocates until everyone caught up with its use.
Industry leaders have resources to fund research, experiment on a large scale, and prove its viability. They also have a huge amount of influence. When big players take the lead in exploring industry-related benefits of blockchain, other people eventually follow suit.
Complying with regulations
One of the biggest challenges to the adoption of the blockchain is regulatory compliance. When stakeholders collaborate to adopt a technology, they put pressure on others in the ecosystem to do the same. Achieving this puts them in a better position to strive for blockchain-friendly regulations with relevant bodies. Regulators want to be sure that the technology is consumer-friendly, and falls within its legal frameworks. Industry leaders must ensure that they convince these bodies of the security, technological advantages, and business compliance that the blockchain brings.
Blockchain is still a long way from being a household name. Large, significant changes need to happen before it can be widely used. Industry leaders need to take the lead for adopting and promoting the use of the blockchain. And stakeholders have to do their bit too. Who knows, maybe blockchain technology will be as common as mobile phones today in the next twenty years.