Blockchain technology is mainstreaming by the day. It holds the potential to streamline business processes, enable new business models, and reshape industries. When implemented effectively, the blockchain technology can improve the efficacy, help cut costs, and augment revenue by building new products and services.
And yet the enterprise adoption of blockchain remains low. According to a report from Gartner, issued in May 2018, just 1% CIOs agreed to have adopted some kind of blockchain within their organisation and only 8% said that they were in active experimentation or short-term planning with blockchain. (Source)
The slow rate of blockchain adoption by enterprises can be attributed to the barriers that businesses must overcome to achieve a mainstream adoption of the technology. To begin with, a majority of enterprises are still apprehensive of the blockchain vulnerabilities.
Yes, blockchain is secure and distributed. But, permissionless blockchains allow anyone to run a node. This feature is a beauty for hackers and other malicious users who can exploit it to their benefit. Multiple blockchain networks including ZenCash and Bitcoin Private have been successfully hacked allowing the wallets to double spend transactions.
In May 2018, security researchers discovered vulnerabilities in the EOS platform as well. The vulnerability, as was reported by the researchers, had the potential of giving attackers a remote control over the participating nodes in the network. (Source)
These vulnerabilities are just one of the many barriers that the enterprises have to tackle for technology adoption. Other barriers to blockchain include slow transaction speed, scalability issues, and interoperability between different platforms and solutions. Abandoning the legacy infrastructure that the enterprises have been working on is also a hurdle in the road along with the technical complications of the technology.
Throughput Speed and Scaling Limitations
The overall throughput speed of the blockchain networks is one of their most obvious limitations. Permissionless blockchains need to validate transactions at every participating node. The larger the network, the more its transaction per second (tps) will typically suffer. This will lead to a poor scalability score.
The Bitcoin blockchain, which is often thought of as the prime blockchain network, can only handle between three and seven transactions per second. This has led many enterprises to believe that in the long run, blockchain will not be a viable option for large-scale applications.
What is being done to solve this?
Increasing number of developers are working to close these performance gaps. Permissioned blockchains, which validate only at certain, pre-approved nodes, are being developed. Many projects are exploring the option of sharding — which divides the network of a blockchain node into smaller sub-networks which can perform computations parallel — for scalability. Their parallel performance allows for more number of transactions to be validated simultaneously thus improving the throughput speed. This improvement makes blockchain useful for supply chain, healthcare, and trade finance applications.
Legacy Infrastructure
Blockchain brings with itself a new infrastructure. If enterprises really want to benefit from the technology, they need to either embrace the new infrastructure and build their data on that or find a way to integrate the existing system into a blockchain. This is a major barrier. It might get troublesome for blockchain solutions to handle all functions needed by enterprises thus making it difficult to completely eradicate the legacy structure.
Facilitating this move smoothly calls for meticulous planning, time, and monetary investment which most enterprises are unwilling to put in.
What is being done to solve this?
The Eleven01 team is developing solutions in the Eleven01 protocol which allows enterprises to swiftly integrate their existing IT landscape the blockchain without any hassle. This allows enterprises to embrace the new technology without having to put in scrupulous efforts.
Blockchain Talent
To implement, use, and build on blockchain, enterprises need access to blockchain talent. They need developers who understand the platform and can exploit it to the best of their benefit. The blockchain space is still relatively new and keeps growing at a rate that proficient professionals in the space are hard to find. In such a scenario of large demand and limited supply, enterprises must surrender to paying large figures to qualified individuals.
This high set-up cost stops the enterprises from adopting the blockchain technology. The high amounts of energy required to keep most blockchain networks running also add to this cost.
What is being done to solve this?
The Bitcoin, and other similar, blockchain networks consumed high amounts of energy because of the proof-of-work mechanism they used. New consensus mechanisms such as the proof-of-stake have been developed which consumed lesser energy to function. Multiple blockchains, including Ethereum, are moving to these mechanisms to cut costs.
As for the limited talent, it only makes sense to increase the knowledge and awareness of the blockchain technology among the young talent hubs. India hosts the larger developer market in the world and the Eleven01 is taking that opportunity to hone the blockchain talent in the country. The Eleven01 team has partnered with 50 academic institutions across the country to develop India into a perennial talent pool for blockchain. Gradually, with the right training, enterprises will have access to millions of brilliant blockchain developers.
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