Barriers to adoption of Blockchain technology

10 years after Bitcoin’s whitepaper…

Published in

XONIOtoken

5 min readOct 3, 2018

Although it only reached the mainstream radar in 2017, blockchain technology has actually been around for a decade. This year marks the 10th anniversary of the Bitcoin whitepaper publication. Early adopters have preached about the potential of blockchain to change life as we know it, the same way the internet has since its invention. Why wouldn’t they? Blockchain technology promises transparency, elimination of intermediaries, reduced costs, faster transactions, cryptographic security and immutability.

The blockchain business

To no surprise, the sheer number of companies that want to enter the blockchain landscape continue to grow. To this year, more and more ICOs are launching with various use cases of the blockchain at heart. Companies continue to find problems to solve using the technology, from banking, mobile VAS, e-commerce, and more.

But are people ready to integrate these blockchain-powered products and services? In emerging markets where crypto interest is high, is there readiness to enter the token economy?

Why can’t adoption keep up with the crypto hype?

A survey conducted in the largest cryptocurrency markets in the world shows that as of March 2018, only 7% own cryptocurrencies. This is pitiful considering that the same survey shows roughly two-thirds of respondents have heard of cryptocurrency.

Here are the five main obstacles that impede the mass adoption of blockchain technology.

1. Regulatory uncertainty

The unpredictability of regulatory environment is the biggest barrier faced by blockchain technology. This is according to a survey conducted by Pricewaterhouse Coopers (PwC) of 600 global executives across 15 countries. Existing regulations have not caught up to innovation. This prevents or slows the adoption of many institutions from deploying blockchain technology. Until the regulatory framework becomes established, we won’t be seeing mainstream products and services utilize blockchain technology any time soon.

2. No universal use case

There is an infinite number of problems that blockchain technology promises to solve. In a Forbes interview, Ethereum co-founder Vitalik Buterin also commented that the biggest problem the blockchain space is facing at the moment is the high ratio of hype beging generated versus actual use cases.

Each of the hundreds of ICOs that launched last year promised to provide its own unique solution to a unique problem. Although this is a big step towards innovation, it also poses a barrier to mass adoption. With the number of companies proposing to build their own use case for blockchain, it will take a long time before we see a primary use for it. The technology’s benefits are better realized when different players work together to create a shared platform.

3. Speed

Bitcoin introduced blockchain to the world as a means to store and transfer value. It was portrayed as a currency — electronic cash — without the need to go through a financial institution. You’d think that the elimination of a middle-man would make transactions more efficient. However, that is not the case.

Bitcoin processes about 7 transactions per second. Sounds impressive? Visa on the other hand can handle up to 50,000 transactions per second. With the existence of an existing alternative that is that much faster, it would be difficult to convince the ordinary Joe to switch from the non-blockchain solutions.

4. Trust

One of the selling points of blockchain technology its decentralized feature: it is, by default, characterized by transparency and trust. However, based on the PwC survey, lack of trust among users is the second most-often stated barrier to adoption of blockchain technology. It says:

[C]ompanies confront trust issues at nearly every turn. For one, users must build confidence in the technology itself. As with any emerging technology, challenges and doubts exist around blockchain’s reliability, speed, security and scalability. And there are concerns regarding a lack of standardisation and the potential lack of interoperability with other blockchains.

The lack of a universal use case contributes to this trust problem as PwC likewise found that many executives are unclear on what blockchain really is and how it is changing all facets of business. Its abstract and technical nature lends to this lack of understanding. Aside from the technology, building trust in the network is also a challenge. “It is perhaps ironic that a technology meant to bring consensus hits a stumbling block on the early need to design rules and standards,” the survey says.

5. Not user-friendly

A good piece of technology has the ability to easily work with the user. In other words, it has to be user-friendly to the point that it is invisible: no need for a crash course or an instruction manual. A mainstream user will not bother with the complexities of the solution so long as it does what is expected. Blockchain is not quite there yet.

Read more on blockchain adoption vs education here.

Take for example the process of purchasing cryptocurrencies using existing means. A novice crypto-buyer has to go through the following process:

1. Download the cryptocurrency app or go to its website (and make sure that it is not a phishing site);
2. Register and go through KYC (this could take weeks depending on the KYC process of the app/website);
3. Create a cash-in order;
4. Pay the cash-in partner;
5. Wait up to 24 hours for the confirmation of the cash-in order;
6. Upon confirmation, convert the fiat into crypto, subject to a charge of 2–3%;
7. Wait for the conversion to be processed for about 10–60 minutes.

This is only for the cash-in process. The journey of moving around the cryptocurrency involves another set of steps that involve random strings of letters, mnemonic phrases, private keys, transaction hash, and another set of transaction fees. This probably explains why only 0.19% of the Asia Pacific population has a blockchain wallet.

Enter a better way to crypto

A number of blockchain companies have tried to solve this tedious process any regular joe would endure just to enter the token economy; but for emerging markets, there’s XONIO. Read more on how XONIO offers a better way to crypto

XONIO provides a platform where users can simply convert their prepaid mobile airtime to tokens. This significantly shortens the user’s journey of buying cryptocurrency.

Telco prepaid airtime offers a great opportunity for mass adoption of blockchain technology. Everyone already has it; it is easy to cash-in; and it is easy to transfer.

The XONIO Platform also features an on-ramp to crypto strategy that allows its users to convert XONIO tokens to various cryptocurrencies.