By David Drake
Since its inception, blockchain has experienced significant growth with tests and trials being conducted in different sectors. Its popularity has been based on its ability to provide transparency, security and transaction tracking solutions. However, despite the increased popularity of blockchain benefits, mass adoption of the technology remains a mirage for many with trading volumes remaining insignificant.
Joseph Oreste, founder & CEO of Qupon says, “Trading volume is insignificant due, in part, to the lack of commercial applications running on these distributed ledgers. Here at Qupon we are doing our part to revolutionize the multi-billion dollar coupon industry, providing a global decentralized marketplace for merchants to advertise crypto coupons as digital assets on blockchain technology.”
For corporates, the major hindrance to mass adoption of blockchain is the cost of changing to a new system. Such a shift would involve acquisition of new equipment and development of customized software. It also means recruiting and training of new staff to develop and utilize the system.
Companies that choose to integrate blockchain in their operations will need to fund implementation of the new technology. Even so, this component would be dependent on whether other organizations implement the same. There are companies that have invested millions of dollars in current systems. For such firms, investing similar amounts in blockchain-backed systems would be a challenge. This means any company that intends to adopt blockchain technology would have to weigh the cost vis a viz the benefits and see if they the overall benefit will outweigh the cost.
With blockchain technology, companies can develop products and systems that address specific problems either internally or externally. For instance BlockVest has developed a platform for managing digital asset portfolios. Other companies that are creating innovative products on blockchain for the finance sector are LiveTradr in portfolio optimization, Gath3r in web mining monetization and BQT in cryptocurrency trading.
In the social sector, URAllowance and ONe Network are enhancing social interactions through family smart contracts and social media security respectively. While this is encouraging, each innovation can only serve the company that developed it because the industry currently lacks compatibility standards to facilitate interoperability.
According to James Lopez, co-founder of HFC Coin, the Mortgage Blockchain Company, regularizing and understanding blockchain is critical for companies to determine the value of adopting blockchain.
He says, “The terminology used to describe blockchain falls in the same category of optics. Standardizing terms that create separation from cryptocurrency will help transform the optics of how blockchain is perceived, in turn, helping larger businesses truly assess the financial viability of the technology. Artificial Intelligence has suffered from similar stigmas thanks to the Terminator movies and the dronings of Elon Musk and crew.”
Security and Scalability
No technology is considered foolproof. According to Varun Mayya, CEO of Avalon Labs, blockchain has been used to develop various use cases and those that are successful have brought about security and privacy issues.
He says, “Blockchain has very specific use cases and while the community has been attempting to tokenize everything, we’ve seen that the successful projects often involve systems internal to a company that are susceptible to internal fraud. That and smart contracts seem to be hot use cases of the blockchain.”
Noting that most applications in blockchain require smart contracts that contain user information, Maya says that companies must address the question of security data. He further highlights scalability of blockchain in its current incarnation as the other factor that limits global adoption. Scalability is a big concern because blockchain networks are not able to handle large transactions on a day-to-day basis.
Even so, the increasing interest in blockchain and its ability to resolve issues and eventual acceptance of benefits that blockchain provides show that eventual mass adoption of the technology is well underway.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.