Numerous factors have resulted in the public sector resisting blockchain adoption; however, Matic network’s modified plasma sidechains which are built on the Ethereum Blockchain, now largely satisfy enterprise adoption requirements. Distributed ledger technology allows for the brokering of trust on a peer-peer network, in contrast to relying solely on a trusted third party, for example a bank or other financial institution.
One of the main hindrances to blockchain adoption has been organisational considerations, specifically management support. Top management in institutions have been reluctant to support blockchain development and integration due to organisational readiness, complexity of information and organisational support (Clohessy, Acton, & Rogers, 2018, p. 60). However, in a survey conducted by Deloitte (2019), the research of the wealthiest top enterprises in the world showed that 53% of the companies surveyed were prepared to invest $5 million into blockchain development and 86% believed that blockchain will achieve mass adoption. Even governments are starting to invest in blockchain technology development. The South Korean government recently pledged 6 Billion to blockchain technology companies for development purposes (Wolf, 2020). The position of enterprise is rapidly changing and the need for blockchain technology integration is becoming increasingly urgent.
Ethereum & Matic Collaboration
It is widely known that the Ethereum Blockchain has technology problems and that in its present state is unfit for mass adoption purposes; however, Vitalik Buterin has been aware of this for some time and as a consequence published, “Plasma: Scalable Autonomous Smart Contracts” (Buterin & Poon, 2017). The Matic team since that time has been developing the adapted Matic plasma sidechain architecture – mainnet is due for launch by the end of March 2020 (Delayed by maximum of 6 weeks). Thus, Ethereum’s technological problems have been to a great extent solved. Even though, Eth 2.0 which will take several years to develop, it will enhance 100 times the stability of the existing level 1 blockchain foundation, thus contributing even greater layer 2 capacity. The Ethereum blockchain along with Matic sidechains will play a dominant role in enterprise mass adoption going forward. Currently, approximately 50 projects have integrated with Matic Network (pre-mainnet launch). It is almost certain that hundreds more will integrate after mainnet in order to be able to claim layer 2 scalability and remain credible as blockchain projects.
How the Ethereum Foundation Onboarded UNICEF to Blockchain
In a recent article published on the 24th February on Coindesk by Leigh Cuen (Cuen, 2020), Explains how Ethereum got the United Nations Children’s Fund (UNICEF) to use the Ethereum Blockchain. The author acknowledges the need for improvement of the Ethereum technology but at the same time demonstrates that Ethereum is a trusted blockchain and currency. UNICEF intends to deploy nearly $45 billion in diverse programs. Matic Network will clearly play a major role for the Ethereum Blockchains’ scalability needs as it grows even larger and larger. Currently, 95% of Dapps are built on the Ethereum platform. Scalability another major hinderance to blockchain mass adoption has now been largely resolved by the inclusion of Matic Network into the Ethereum ecosystem.
Finally, trust is an important factor in blockchain adoption and it has taken a few years to establish it. Ethereum’s collaboration and involvement with UNICEF is an example of built trust that will influence other enterprises and governments to embrace blockchain. According to (Koster & Borgman (2020)The transparency of blockchain technology can enhance and even create trust among all parties.
Integration of Public and Private Blockchains
Why might it be necessary in some instances to integrate private and public blockchains. Woodside, Augustine and Giberson (2017, p. 71) discuss the social constraints that have hindered institutional level blockchain adoption. On a public blockchain data is transparent and viewable to anyone; however, this creates a drawback, in certain instances, for enterprise usage. The reason for this is that some companies require a record of personal information which could not be privately stored on a public blockchain. The solution according to Woodside et. al (2017) is to remove these limitations by integrating private and public blockchains if required by institutions. For example, private personal information could be stored and encrypted for security on the private blockchain owned by the company and the transaction information can be publicly viewable on the public blockchain (Matic sidechain). Sandeep Nailwal, COO of Matic Network has stated that Matic can integrate private chains with public Matic sidechains to secure privacy of data. This is a giant step that needed to be overcome in order for enterprise adoption to take place. 2020 promises to be the year when these kinds of partnerships begin on a large scale. Ethereum the world’s most used blockchain provides enhanced security and Matic sidechains provide mass adoption level scalability.
Other Considerations that Have Prevented Mass Adoption
Several other considerations which have caused enterprise to lag in blockchain adoption have largely been resolved by the introduction of the innovative adapted Matic plasma layer 2 sidechains and the layer 1 Ethereum foundation. Firstly, data security -the Ethereum platform a known for its outstanding security. Secondly, cost and savings – Matic will avail fees approximately 100 times less than the current Ethereum fees on its sidechains. Thirdly, Privacy – is guaranteed on decentralized platforms. Fourthly, Continuation of services – this is virtually guaranteed and has been proven to be reliable over several years. This is the reason that Eth 2.0 will take so long, to ensure a flawless continuation of services. Matic inherits to a large extent this superb Eth feature. Fifthly, throughput – Matic provides up to 65 000 TPS on a single sidechain. Hundreds and thousands of sidechains can be created and even merged (horizontal sharding) to provide virtually unlimited transactions per second. Sixth, usability – one of Matic’s fundamental goals is to create a user friendly experience sufficient to encourage mass adoption and usage by anyone. Seventh, technological maturity – Matic has taken several years to develop and has passed through numerous iterations and testing to ensure 100% reliability. Likewise, Ethereum has passed the test of time and is the default blockchain for developers due its well earned reputation and standing in the world. Eighth, Permissions – Matic offers decentralization and well as integration of private and public networks to ensure total privacy or limited privacy as in the case of a financial institution which is regulated by law to save private information. Lastly, energy consumption – Matic sidechains are proof of stake (POS) in contrast to proof of work (POW) as in the case of Bitcoin which consumes huge amounts of energy impacting negatively environmental concerns.
Bitcoin (BTC) Transactions Powered by Matic Sidechains
Is was announced today (2nd March, 2020) that BTC transactions by the Ren Alliance will be powered by Matic sidechains. This is only the beginning of Matic adoption which will be used for scaling numerous blockchains. The Announcement can be seen below as it was presented to the Matic community.
"Matic is joining the first cohort of Ren Alliance utility members to enable cross-chain asset support on Matic Network sidechains.
Matic Network will therefore be able to provide the transactional infrastructure for fast, cheap and secure BTC transfers, in the same way we are currently providing for Ethereum-based assets. This will essentially give Matic the similar end user features as the Lightning Network.
We are thrilled to be providing another layer of valuable utility for Matic Network and supporting the evolution of DeFi alongside the Ren Alliance. Here’s to a new era of seamless BTC transactions, powered by Matic 🥂"
In conclusion, many factors have to date prevented mass adoption of enterprise and governments agencies. Matic Network & the Ethereum Blockchain’s collaborative effort has resulted in the integration of Ethereum’s layer 1 and Matic’s layer 2 integration to solve the existing technological scalability problem.
Matic network is due to launch by the 31st of march 2020. Currently, approximately 50 projects have built on Matic from the ground up but with the mainnet launch numerous other are likely to follow in order to claim layer 2 scalability and maintain credibility as blockchain projects.
In addition to total decentralization, Matic offers the integration of public and private networks if required by law for some institutions, for example, UNICEF, which is using the Ethereum blockchain will have some enhanced requirements.
Matic Network and Ethereum Blockchain integration have together resolved the majority of issues which have previously prevented mass adoption by enterprise. Namely; data security, cost and savings, privacy, continuation of services, throughput, usability, technological maturity, permissions, and energy consumption.
2020 is the year which will see much growth and further development in blockchain. Enterprise is eager to embrace blockchain and the most trusted blockchains will be sought after for integration. Matic Network as a crucial component of the Ethereum Blockchain will undoubtedly see exponential growth as Dapps, institutions, and other blockchains integrate to save money and enhance their throughput / scalability to mass adoption level needs.
Contact a Core Team Member
For those interested in building / integrating with the Ethereum / Matic network you can contact a member of the team at https://matic.network/about/ where individual team members contact information can be found, or at email@example.com
Buterin, V., & Poon, J. (2017, August). Plasma: Scalable Autonomous Smart Contracts. Retrieved from https://pdfs.semanticscholar.org/cbc7/75e301d62740bcb3b8ec361721b3edd7c879.pdf
Clohessy, T., Acton, T., & Rogers, N. (2018). Business Transformation through Blockchain. London: Palgrave McMillan. https://link.springer.com/chapter/10.1007/978-3-319-98911-2_2
© Can Stock Photo / kentoh
Cuen, L. (2020, February). How the Ethereum Foundation got UNICEF to embrace blockchain. Retrieved from https://www.coindesk.com/how-the-ethereum-foundation-got-unicef-to-embrace-blockchain
Deloitte. (2019). Deloittes 2019 Blockchain survey - Blockchain gets down to business. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/se/Documents/risk/DI_2019-global-blockchain-survey.pdf
Koster, F., & Borgman, H. P. (2020). New kid on the block! Understanding blockchain adoption in the public sector. Paper presented at 53rd Hawaii International Conference on System Sciences, Hawaii. https://www.researchgate.net/publication/339028002_New_Kid_On_The_Block_Understanding_Blockchain_Adoption_in_the_Public_Sector
Wolf, R. J. (2020, January). 6 Billion KRW pumping into blockchain; DID a Popular Feature. Retrieved from https://theicon.ist/2020/01/21/6-billion-krw-pumping-into-blockchain-did-a-popular-feature/
Woodside, J. M., Augustine, F. K., & Giberson, W. (2017). Blockchain technology adoption status and strategies. Journal of International Technology and Information Management, 26(2), 65-93. Retrieved from https://scholarworks.lib.csusb.edu/jitim/vol26/iss2/4/