Is Blockchain Losing Its Mainstream Luster?
Blockchain has made major strides recently as big banks and retailers have experimented with it. The technology, however, has still not hit the mainstream, and many people still don’t understand its true purpose.
There are three major problems that are keeping the blockchain out of the mainstream: poor reputation; lack of education; and lack of full solutions.
Even though blockchain has many use cases outside of bitcoin, many companies and individuals still associate it with the virtual currency, which continues to struggle with a bad public image, as many associate bitcoin with criminal activity.
“The biggest misconceptions around blockchain are that it is used for drugs and money laundering,” Horizen co-founder and CEO Rob Viglione said in an interview. “Many mainstream media articles over the last 10 years have been skewed, with implications or direct accusations that bitcoin and blockchain technology are all about money laundering and online drug markets.”
Charles Manning, CEO of Kochava, also pointed out that because blockchain is so closely associated with virtual currencies, it can be difficult to show people how it can be used for other purposes.
Lack of education
Very few people understand blockchain, and even fewer are trying to explain its true purpose.
Viglione points out that this, “lack of education around what the innovations in blockchain really are,” leads to, “a negatively biased broad opinion.”
There are several reasons for this issue. One is that there is a great deal of mass speculation with blockchain.
“We are in a very early stage of applying blockchain to old and outdated systems, which drives the mass amount of speculation,” Manning said in an interview.
Another issue is that many blockchain solutions are not built with an easy user experience in mind, which increases the perception that blockchain is too complex and arcane.
“As an industry, we have to improve how we educate the public, businesses, and regulators on the technology and its vast promise, and we have to do a better job creating great products that people want to use,” Viglione said.
Lack of full solutions
The biggest issue holding back wide-scale adoption of blockchain is that there are no major fully developed solutions based on the concept. While there are many startups developing various blockchain solutions, none of them has reached the mainstream yet.
“Adoption is hampered by a lack of fully developed solutions and understanding of the benefits,” Manning said. “Just like any new technology, it takes time to migrate from old technology or platforms to new ones. This technology isn’t something that can be produced overnight either; when executed correctly, distributed systems are very complex and elaborate.”
Additionally, according to Rikesh Tapa, CTO of Blockparty, some companies are simply trying to use blockchain as a tool for “an extreme high-frequency transaction system,” even though blockchain has many other potential uses in retail, financial services, real estate, etc. By focusing on this particular use case, the industry is not reaching its full potential with fully developed solutions, he said.
“We need to move the tunnel vision focus to the grander scope of blockchain rather than being fixated on the fact that we cannot use blockchain to do multimillion-dollar trades in a nanosecond.”