Is Blockchain Technology the Panacea the World is Looking for?
Image by Pete Linforth from Pixabay
What is blockchain technology? Blockchain in simple terms, is a way of storing information digitally and in a way that is publicly accessible. The term Blockchain, when broken down, “block” refers to data, and “chain” refers to the database (or ledger) where the blocks are stored. There are 3 types of blockchains; Public Blockchain, Private Blockchain, and Consortium (or Federated) Blockchains; each of which has its own inherent pros and cons. Blockchain technology is predominantly used in cryptocurrency management, identity management, the processing of transactions, storing documentation, keeping medical records, and other management, and business transactions. The data (blocks) are stored in a decentralized manner, and it’s this decentralization that is a major drawcard for the use of this technology.
What is decentralization? Simply, it means that the data is not stored in any one location, rather, the information is stored and shared between many computers (nodes) whereby no single node (or person) has control over the data. The data added to the blockchain is processed and verified by many nodes, and once verified by the nodes in the network (consensus), the data is then stored (in blocks, on the blockchain). Once consensus is achieved and stored on the blockchain, it is protected by encryption with a digital signature. The data cannot be altered, deleted or corrupted. This kind of security and preservation of data is what makes using blockchains so attractive. Despite the attractiveness and allure of blockchain technology, there are many reasons why it is not being implemented by more businesses.
In this article we will look at some of the main reasons (the barriers) causing this lack of implementation. We will also discuss some of the ways HyperionX are using blockchain technology to change the way we interact on social media, how we shop and e-Commerce, the way non-profit organisations are held accountable, and the ways in which we can donate to charity.
Lack of Understanding and Research of Blockchain Technology
Blockchain technology is a relatively new technology invented by the infamous “Satoshi Nakamoto in 2008. In was created to serve as the public transaction ledger of the cryptocurrency Bitcoin (BTC)” . Since 2008 there has been a lack of complex research and not enough focus has been on the actual technology behind Bitcoin . It is this lack of research that is affecting the adoption of blockchain technology and currently the fact that there is “no legal framework backing or supporting smart contracts” , which is making it more difficult for companies to fully embrace it and want to implement it into their businesses . Earlier in 2019, Deloitte conducted a ‘Global Blockchain Survey’ , where 29% of respondents chose a lack of understanding of blockchain technology as one of the main barriers to the implementation of blockchain technology . As mentioned earlier, the fact that research tends to focus on Bitcoin rather than the technology that Bitcoin utilizes, this contributes to the lack of understanding of the technology. There is insufficient evidence on the true effectiveness of blockchain technology  and 22% of Deloitte Global Blockchain Survey respondents agree . Although there are many use cases of blockchain technology, such as cryptocurrency, voting in government elections, and supply chain management , if the technology is not adopted early there is increased reluctance to adopt such technology in future .
Regulation, Law, and Politics in Blockchain Technology
With all the hype around this technology one of the biggest categories of barriers is ‘regulation, law, and politics . In 2019, Deloitte conducted a study in which company executives were asked “What are your organization or project’s barriers, if any, to increasing adoption and scale in blockchain technology?” . 30% of respondents [note 1] said that regulatory issues were the main barrier to further investment in blockchain.
If we focus on cryptocurrency, where much of the blockchain technology is currently used, in an article posted on Coin Central they discuss the issue of cryptocurrency regulations stifling innovation. “The problem is that nobody knows what the rules are and it's just too confusing”  says Jon, the cofounder at ShapeShift. “… I think a system where there are a lot less interpretation and a lot more clarity of where the various lines are and what falls in what bucket would be extraordinarily helpful for the entire environment.” It is this muddy interpretation that is creating barriers of implementing blockchain technology.
In an article by Ross Bene, on emarketer.com, Arnold Spencer, general counsel of bitcoin network Coinsource said, “A company can fully embrace a blockchain strategy, but it will not be successful until the regulator blesses it. We see many companies that are excited about the possibilities of blockchain but are very reluctant to rely on blockchain until they are confident regulators will be comfortable. Companies are afraid of violating securities laws here in the US. Law firms are giving faulty advice. Many crypto and blockchain companies are domiciling overseas in countries that are more crypto friendly” .
Unlike the rest of the world, Malta is paving the way with how things should be done. Malta are the first country to give a clear framework in which business should operate, and they [Malta] legitimize ICOs and blockchain technology in general. Contrary to Jon’s opinion, CEO of CrowdFundX, Darren Marble, believes that “[regulation] is not there to stifle innovation but to protect investors and (make sure that the scams and the bad actors go. Otherwise, investors will stop investing and the whole industry will disappear” . I tend to agree with both Jon and Darren, but there needs to be action on what is and is not acceptable. I believe Switzerland’s method of assessing each on “case-by-case basis and regulatory approach , is the best method until further research has been done and the test-of-time shows what actually needs to be regulated.
Lack of Standardization & Adoptability
According to Saleem Khan, from data analytics firm Dunn & Bradstreet, there is a lack of clear standards on how to best utilize blockchain technology . Many technology companies have their own standards, but the lack of best practice causes a limitation to the adoption of the technology. Standardization and regulations will further increase the difficulty for wider adoption of blockchain technology as discussed by Giovanni Perani, “regulating the technology will put a brake on people’s freedom to create and write their own code, therefore limiting what it may offer” . Marco Dell’Erba agrees, in his paper titled “Do Smart Contracts Require a New Legal Framework?”, Marco mentions “any trend that does not contribute to the establishment of common practices may cause significant frictions and obstacles to the entrepreneurial initiatives in the commercial sphere” . Further to this, the lack of standardization is causing concern on how networks will be able to interact with each other if different codes and practices are used . “On coding site GitHub, there are over 6,500 active blockchain projects which use different platforms with different coding languages, consensus mechanisms, protocols, and privacy measures” . On one hand standardization will make it easier to adopt the technology, and on the other, it stunts people’s freedoms and creativity to produce new codes and create new use cases for blockchain technology.
Is Blockchain Technology the panacea the world is looking for? In the Deloitte 2019 Global Blockchain Survey, only 8% of respondents believe that there are no barriers for them to implement blockchain technology. That means 89% of respondents have doubts  and that is a lot of people. With a lack of research, and especially long-term research it’s understandable that big corporations and businesses are reluctant to implement blockchain technology into their everyday business. Being decentralized, who is responsible to promote the technology? There are thousands of projects trying to address concerns over blockchain technology. Does this help or hinder? In my opinion, it creates confusion, and is increasing the barriers related to the implementation  and adoption of blockchain technology. As wonderful an idea decentralization is, it’s still too early to ensure that blockchain is the panacea the world is looking for. With potential security threats, lack of in-house capabilities, and regulatory issues being the major barriers, technology companies need to find solutions to these barriers as well as addressing and promoting the use cases of blockchain technology. A third of all people believe  that they cannot justify a return on investment (ROI) while another 25% concerned about exposure to sensitive company data .
In future articles we will look at other reasons why blockchain technology is not being implemented and examples and ideas from technology companies such as HyperionX and the ways they’re making it simpler for blockchain technology to be used, implemented and adopted into every day business.
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 Equal highest response was with ‘Implementation of blockchain’ being a barrier to greater investment in blockchain technology. 30% was a 9% decrease compared to 2018 results.
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