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Years after its inception, Blockchain remains a central focus of the tech world, thanks to its potential to revolutionise business activity in every sector. Yet when it comes to the actual integration and implementation of Blockchain technology into mainstream use and business value chains, people may be getting ahead of themselves.
Public interest in Blockchain has largely been limited to the hype surrounding cryptocurrencies – and in some ways, the Bitcoin phenomenon itself is a useful metaphor for Blockchain as a whole. In both cases, while the potential for genuine disruption is great, the current level of excitement nevertheless seems premature, as a number of complex obstacles still need to be overcome.
Good things come to those who wait
While Blockchain is almost certainly the future, and its potential to become the new norm is very real, mainstream adoption may not come as soon as many people think. Some theorise that it could take over a decade before the practical path forward has been properly cleared. Ten years may seem like a long time, however as history shows us, revolutionary new technologies rarely take over in the blink of an eye.
The Internet itself is a relevant example for comparison, as widespread adoption did not take place immediately. When the Internet was born, many people sensed that it had vast potential, but others struggled to understand what exactly it was and how to use it. During its early years, when progress was slow, some doubted that it would ever become mainstream.
Lack of understanding
While most people understand that Bitcoin is a type of digital currency that can be used as a method of payment, this understanding does not actually extend to what the wider Blockchain technology is, or why it is so significant.
Even before we dive into the technical aspects, it is worth pointing out that the particular jargon used widely throughout the Blockchain universe already provides a challenge for the everyday consumer. Phrases like “mining”, “blocks”, and “distributed ledgers” in the context of Blockchain can be confusing without the proper background knowledge.
These kinds of phrases make it difficult to fully explain what Blockchain is – and therefore its value and potential – to new users. If people don’t understand what value Blockchain can provide, they won’t convert. The lack of knowledge within the public sector is a huge barrier that currently stands in the way of Blockchain being ready for the mainstream.
This lack of understanding also brings misconceptions. Many still believe that Blockchain and cryptocurrencies are the same thing; but this is akin to believing that an engine is the same as a car. In reality, Blockchain has many other uses beyond its ability to power a cryptocurrency. These uses include ownership transfers, data sharing, and monitoring supply chains, for example.
This knowledge gap means that education is needed before Blockchain use can become widespread in society. The abstract nature of Blockchain is the first conceptual hurdle that needs to be overcome.
Of course, not everyone in the world needs to fully understand the intricacies of Blockchain technology before its use can become common. As we see with the Internet, most everyday consumers do not know exactly know how the Internet works, but still use it regardless.
The same is true for car engines; few people on the street can walk you through the jargon that is found throughout the world of automobile engineering, but the end product and its basic functions are simple enough that adoption is a relatively easy matter.
By contrast, Blockchain technology is complex at its core, and has already been hobbled in the public mind by popular association with the notoriously volatile Bitcoin rollercoaster. Businesses as well as consumers need to decouple the idea of Blockchain from such misleading associations, before they will make the leap necessary to put their trust in the technology.
Lack of proper infrastructure
Another barrier preventing Blockchain from going mainstream is that current technologies and employee capabilities are not able to handle implementation of Blockchain at a large scale. On the current scale of relatively modest adoption, Blockchain-based systems can continue to function smoothly. However, when the technology becomes mainstream, users and transactions could jump by orders of magnitude. Current platforms and technologies are not set up to organise or deal with the large amount of information required for such heavy use.
Moreover, upskilling of employees will also be needed on a large scale. If Blockchain adoption becomes mainstream, businesses will have to find far more qualified personnel to manage the various applications of the technology. However, as the technology is still in an early phase, at the moment we do not have enough skilled people to properly support its widespread adoption.
Other concerns for the business community
Other challenges include the ability of business to gain strategic value from Blockchain. Many businesses will not divert resources into a new concept until they can be convinced of a clear return on their investment, as well as the compatibility of partners across a supply chain.
Moreover, issues surrounding security have raised concern among many business leaders. These types of problems continue to tarnish Blockchain’s image, preventing it from being seen as a secure technology ready for mainstream adoption.
Before Blockchain can be implemented for mainstream use, business models will also have to be changed for adoption. ROI will need to be properly quantified. And to build a Blockchain strategy which can be integrated with wider ecosystem and technology deployment across the organisation, businesses need to put in place effective partnerships across the supply chain.
Each of these steps takes time, and many executives are likely to take a ‘wait and see’ approach before investing in a Blockchain-powered future.
A matter of time
Optimism surrounding Blockchain is warranted within the business community, despite the conceptual and practical issues surrounding education and implementation. While Blockchain technology could well be the future, it is not quite ready yet. Over-enthusiasm at an early stage is exactly what spurred the rise and fall of Bitcoin.
Businesses, investors, and everyday consumers must learn to look past the hype and study the current state of Blockchain. The benefits of the technology are real, and have the potential to remove ongoing issues that companies today often face. While the present security concerns surrounding the technology are valid, maturity will come in time, and trust will follow along with it.
In order for the Blockchain industry to mature and become ready for the mainstream, education is key. Education – both for the public and businesses – is the first step that has to be taken before Blockchain can be widely adopted with any success. The public needs to understand why this technology will help them, and businesses need to put the necessary skills in place.
With the right foundation, technological development will proceed at a good pace, just as it has in other disruptive industries. These efforts will support the growing demand for the technology, ensuring smooth operation moving forward.
Businesses will need to keep a close eye on the progress surrounding Blockchain, in order to get the timing right. Adopt too early, and operations may be impeded by too many false starts. Too late, and their competitors will leverage Blockchain to build a competitive advantage that will be hard to overcome. By remaining on top of the issue, and preparing for the right moment to ride the technological wave, businesses can set themselves up for a new generation of Blockchain-powered efficiency and reliability.