What’s stopping countries from adopting blockchain?

Since the advent of Ethereum, the concept of building decentralised applications became a possibility. Decentralisation provides several efficiency gains, and yet, even after a decade of blockchain’s existence, true mainstream adoption is still a distant dream.

This is not to say that countries and their governments aren’t employing this emerging technology — Dubai, Japan and USA have been at the forefront of understanding and implementing the benefits of the blockchain. However, the majority of the countries are still making up their minds about it.

The reason(s) behind these are technological, economic, or political. It is a collaboration of these factors that determine the readiness of society towards blockchain. It is only when a society, or a considerable part of it, is ready to accept a new innovation that enterprises can launch and implement them.

We can examine some of these factors in this article.

Social and Cultural Factors

Familiarity leads to acceptance.

People are more open to a familiar concept or innovation. The technological familiarity of a society decides what affects their everyday lives and how. Societies that have already integrated technological innovations and have experienced the value it can bring are more open to experimenting with new technologies.

This is perhaps the case with Sweden, where the nation’s land registry — because of the country’s familiarity with technological ease and value — is motivated to inch towards making blockchain-based land registry a reality.

In fact, in April 2018, several EU countries came together to form a group called the European Blockchain Partnership wherein they are reimagining information exchange. This is an alliance of Spain, Norway, Germany, France, UK, and Netherlands — all countries that employ various technological inventions in their everyday life.

On the other end of the spectrum lie societies which have been unable to keep up with the technological modernisations. Be it cultural resistance or unwillingness to trust something as virtual as technology and its promoters, expecting a smooth integration of blockchain into these societies is wishful thinking. This is possibly what is witnessed in developing countries.

The real potential and use case of blockchain lies in the underdeveloped or developing societies. In India, for instance, the blockchain technology can bring a change in the way organisations to work and governments govern. There are potential blockchain-based solutions in industries such as supply chain, retail, and even identity management. But their unfamiliarity with technological value and unwillingness to experiment it is keeping them away from blockchain.

In cultural factors, power dynamics play a crucial role too. Blockchain proposes a framework where no single authority has the power to control what happens to the database. While some cultures might be comfortable with this scenario, for instance, Argentina where a non-profit organisation Democracy.Earth is developing a blockchain-based platform that allows people to cast their vote on a distributed ledger, some cultures will not be open to it — the country of North Korea, for instance.

Economic Factors

Blockchain introduced a rather intriguing use case — the cryptocurrency, a non-physical mode of payment. Technologically engaged societies which are familiar with virtual payment methods stand to benefit more from an increased transparency level and lower costs.

Canada, for instance, is the most cashless country in the world conducting 57% of consumer transactions through non-cash methods followed by Sweden at 59%. These societies are more accepting of blockchain-based digital currencies than countries like India which are still working their way towards becoming a digital economy.

Also, more technologically engaged people have an eye for opportunities that blockchain technology presents and are thus eager to seize them. When their blockchain-based solutions are aligned with the larger benefits of the region, they are supported and encouraged by the government making large-scale adoption a possibility.

Political Factors

Governmental support is a crucial factor in the adoption of any novel innovation. While enterprises can serve as catalysts of trust and convince the people to accept technology, the governmental support that the enterprise has mattered as well. Governments that are not petrified by the level of transparency the blockchain technology can bring have welcomed the innovation with wide arms.

Dubai, for instance, is working towards becoming the world’s first blockchain-powered government. From healthcare to education to energy and logistics, the Dubai government is implementing blockchain technology in all of its sectors.

Estonia established the use of blockchain in its e-residency program. This is an electronic identification system which will be used by Estonian residents and those with business interests in the country to access government services through a digital authentication.

Takeaway

The blockchain technology has brought with itself the possibility of a complete makeover, not only for the way certain industries work but for the way people experience life and the way governments govern. While it is natural for the technology to face its due scepticism and criticism, when one looks beyond the preconceived notions, one can truly understand the great potential the technology has. But how willing are we to embrace that and how far are we willing to go to implement it?

Actionable solutions to these obstacles

Blockchain is a technology still in its nascent stages. The first step to overcome the unfamiliarity with the technology would be to build awareness and educate the audience about its working. It is, at the same time, imperative to build meaningful partnerships between technologists, industry experts, and government institutions. Also, identifying the true potential of blockchain in its multiple use cases followed by giving fair opportunities for blockchain-based solutions for these is an indispensable action.

As we have already established, developing countries such as India offer a huge bed of opportunities not only for the technology’s implementation but it’s development as well. India is perhaps taking a step in this direction.

Eleven01 has built the country’s first native blockchain protocol with innovations such as dynamic consensus and optional privacy providing the country with functional access to the technology. While working closely with IT giants and other blockchain-based startups in and outside India, Eleven01 has also established partnerships with multiple state governments to push the development of the blockchain technology. To eliminate the dearth of knowledge at the grassroots level, Eleven01 is working in partnership with over 30 academic institutions around the country.