Blockchain can be said to be one of the biggest innovative technologies of our time. From a little-known cryptocurrency technology, it has now captivated businesses and governments for its potential to create secure applications, numerous use cases, and decentralized nature. Over the last few years, its adoption in the enterprise world has been exponential.
Experts expect the blockchain market to reach $169 billion in 2029, up from only $7.18 billion in 2022. However, the technology still has a long way to go to achieve mass acceptance and adoption. There are many things that have made this to be the case. This article will discuss the top barriers to blockchain adoption and the possible solutions.
Challenges affecting blockchain adoption
This article looks at the most common issues most business owners and industry leaders have found to be the barriers to the adoption and implementation of blockchain. We have also provided the possible ways to overcome the issues and enjoy the benefits blockchain products can bring to your business.
Steeper learning curve
Blockchain is still in its infancy as a technology, and experts in its creation and application are in short supply. Studies show the lack of appropriate skills is a significant barrier to blockchain adoption. Not many people have the expertise to be blockchain specialists. Similarly, business owners are also not quite conversant with technology, making it hard for them to accept it openly.
You want someone to build apps, develop smart contracts or do smart contract analysis, educate employees, or help with implementation. According to data compiled by the Blockchain Council, the demand for blockchain experts has shot up by over 500% since 2018. As a result, the starting salaries of blockchain developers are pretty high.
Most business owners’ worries about implementing blockchain technology and integrating it with existing systems are amplified by the high cost and great difficulty of hiring in this field. One way to close this gap is by adopting Blockchain as a service (BaaS) from those offering blockchain consulting services. It allows your business to take advantage of blockchain technology without needing to hire specialized personnel. It works the same way as other managed services.
BaaS is intended to bridge the gap between various blockchains and can reduce the blockchain skills gap.
Cost of adoption
Research also shows that finances are also a huge barrier to blockchain adoption. Implementing blockchain is not free, and many don’t believe they have the financial capacity to implement the technology. Looking closely at this challenge, you’ll see it’s directly connected to poor knowledge of the technology itself.
If more business owners could become more aware of the technology, it could boost their ability to make a business case effectively. The chances of adoption will therefore improve accordingly. and keep them from making common mistakes in blockchain projects. This obstacle is tied to a general lack of blockchain knowledge and familiarity within the organization. The capability to build a compelling business case for the adoption of new technologies grows at the same rate as the level of public understanding of these innovations.
The same will be true with blockchain. Proponents must prioritize creating a business case showing how the technology’s advantages will outweigh deployment costs.
Another critical barrier to widespread acceptance, adoption, and application of blockchain technology is people’s lack of trust in one another. Here, the challenge is two-fold. On the other hand, your business may be wary of blockchain networks. On the other, be wary of the other lack of trust in the participants in the network.
All blockchain transactions are assumed to be safe, confidential, and you can easily authenticate. Since the network is decentralized, this holds true even though there is no one to check the legitimacy of the transactions. Consensus algorithms like proof of work, stake, and history are essential components of blockchain networks. They ensure that all nodes in the network agree with the terms set in smart contracts before a transaction is completed and recorded on the block.
It guarantees that each new block added to the blockchain is the final, authentic record of events, as verified by every node in the network. With private blockchains, business leaders can achieve more trust in private blockchains where there are no unknown users.
Unlike anonymous public blockchains, you can only work with known members added to the network using digital identities. You can use a private blockchain to offer privacy and transaction traceability.
Access to multiple blockchains
Since more and more businesses are using blockchain, many of them are creating their own systems with unique features, including rules and versions. There is currently no global standard to allow these distinct blockchains to connect.
Interoperability across blockchains means that data can be exchanged, seen, and accessed between them directly without a governing body getting in the way. Lack of interoperability could make widespread adoption extremely difficult, if not impossible.
Interoperability will be important at a time when most operations and cooperation between business functions, vendors, and consumers are typically online. It’s the only way businesses can maximize the return on investment with blockchain projects. Fortunately, developers are working extra hard as there has been a recent rise in interoperability efforts. Newer generation blockchain networks, such as with Cardano, are interoperable.
You could also say that the biggest obstacle is a lack of adoption. The technology won’t develop properly if more people choose not to use blockchain for one or more of the reasons mentioned above. Decentralized ecosystems can work if they are implemented correctly and are widely used. According to research, the growth potential is severely limited because not many businesses fully implement blockchain projects or on a pilot basis.
You can see potential remedies to overcome the difficulties of the barriers, as mentioned in this article. You can overcome these obstacles and create long-lasting blockchain products that will help your business if you have a reliable blockchain consultant on your side. Experts can assist you in developing a business case, educating you, and providing support during implementation for cost and knowledge-related issues.