What Needs to be in Place for Large Enterprise Adoption of Blockchain?

Published in

aelf

6 min readDec 11, 2018

According to the PwC Global Blockchain survey undertaken earlier in 2018 that surveyed 600 executives from 15 territories, 84% reported that their organization had ‘at least some involvement’ with blockchain technology.

However, the report also stated that in another survey, PwC discovered that there are several significant barriers that are preventing large-scale blockchain adoption.

When it comes to new blockchain startups, the stakes are relatively low as there is less at risk. Large enterprises, on the other hand, have far more to lose. They do not want to find their blockchain approach start to consume their resources.

As a result, there tends to be much more to consider when large companies decide to take the plunge and incorporate blockchain into their business models.

The benefits of blockchain adoption

As time goes on, an increasing number of large corporations and global banks are showing an interest in blockchain technology.

Even the likes of Kodak, HSBC, and De Beers are finding innovative ways to incorporate blockchain into their business models.

Blockchain has the ability to vastly increase transparency across many business processes, including the likes of supply chain management, auditing, and tax compliance.

Smart contracts can increase the number of transactions that are possible while reducing the associated fees by automating the process and cutting out intermediaries.

Blockchain technology can also help to reduce fraud by enhancing identity management — a use case that is increasingly being tested out by banks, including the likes of HSBC.

The roadblocks to large-scale blockchain adoption by enterprises

Right now, the entire blockchain industry is still relatively young. While this has benefits in itself, it also comes with many challenges.

First off, if a company decides to implement the technology, it will require a large amount of investment in order to integrate legacy systems and retrain the workforce.

In addition, there is currently a lack of real-world enterprise testing. This adds an element of risk to the technology, which many firms are currently unwilling to take on.

Finally, because blockchain technology is developing so rapidly, it is very difficult for businesses to stay ahead of the curve.

As a result, many businesses have decided to hold off on adopting blockchain technology altogether until the technology has been tested and developed further.

What can we do to encourage blockchain adoption?

There are several major steps we need to take in order to encourage blockchain adoption by the masses:

Increased education

First off, we need to educate more people about what blockchain actually is, and how it works.

Because blockchain is such a new technology, there is still a lot of mystery surrounding it. There is also a huge knowledge gap between blockchain enthusiasts and the general public.

If most people don’t even know what blockchain is or how it works, how can they even begin to understand how it can solve problems within our society?

2. Increased regulation

Blockchain has grown faster than it can be regulated. While this demonstrates how immensely popular the technology has become, it also made many people cautious about investing.

According to a Deloitte report, 20% of executives have stated that regulatory issues are a significant barrier to investing in the blockchain.

Meanwhile, as the technology has become more popular and the stakes have risen, we have witnessed an increasing number of hackers targeting blockchain-based projects.

With each passing day, countries around the world are drafting up new blockchain regulations.

In order for blockchain to become fully mainstream and be used by governments, we need to make sure regulations are watertight.

3. Increased scalability

In order for mass adoption to take place, the technology needs to be able to scale to handle the increased demand.

Right now, a significant number of decentralized applications are built on Ethereum.

However, because each individual node in the Ethereum network stores the entirety of Ethereum’s transaction history, the process becomes more and more cumbersome as time progresses.

Developers are currently looking into a number of different scaling solutions. Sharding and off-chain transactions are currently two of the main contenders.

More recently, single application sidechain technology is receiving more attention. These are blockchains that branch out from the ‘main chain’, and have a designated application. Essentially, these chains all benefit from the oversight and protection of the primary chain which runs the network and verifies the data, but they all have their own specific use case. These single application sidechains are expected to be especially beneficial for large corporations.

However, because the technology is so new, there is still lots of experimentation taking place.

When will this become a reality?

The entire blockchain industry is still largely a work in progress, and it may take a while before full enterprise adoption can take place.

Nonetheless, we are witnessing many positive signs of progress. Over the past few months alone, there has been a significant increase in throughput and interoperability, while at the same time some of the biggest barriers such as cost and complexity are decreasing.

Given the right level of support and guidance, there is lots of potential for businesses to harness the power of blockchain in order to improve their own processes.

The Innovation Alliance, a project created by aelf, is already taking positive steps forward to overcoming these hurdles.

As part of the project, various outside organizations are contributing by pooling vital resources, capital, and experience together in order to solve some of blockchain’s most pressing issues.

Some of the key members of the aelf Innovation Alliance include Michael Arrington (the creator of TechCrunch) and Signum Capital (the Singapore-based digital fund).