Photo by Markus Spiske on Unsplash
Blockchain technology has the potential to improve how businesses operate, whether it’s for small retailers, conglomerates, or anything in-between. Just a few of the benefits that can be had include: better supply chain management, quality assurance, accounting, smart contracts, and improved safety and trust of transactions. There are even projects working on making voting more secure via the utilization of blockchain technology.
With so many benefits, why aren’t more companies investing in utilizing blockchain technology? I’ve found three factors that I believe are some of the biggest obstacles to blockchain adoption by businesses.
The Cost of Mass Adoption
Currently, we don’t have many platforms designed to take advantage of blockchain technology. If you want to use the technology for a specific purpose, then you will likely have to build your own software (or have someone else make it).
Building new software costs a lot of money. One expert estimates that software development costs anywhere from $10,000 for basic apps to $800,000, or more, for unique software with complex functionality.
Few SMBs have enough money to pay for proprietary software. Until a large company releases affordable, blockchain-based software, it’s unlikely that many small businesses will use the technology. This is a shame, because blockchain technology has the potential to save businesses and consumers a lot of money. The initial investment for smaller businesses, is unfortunately pretty steep at this moment.
There Aren’t Enough Blockchain Experts
Blockchain is a young technology. The concept was developed in the early 1990s, but it was not put into practice until 2008, when Satoshi Nakamoto launched Bitcoin. Since blockchain technology has only been around for about a decade, it’s hard to find experts who have the skills to build platforms.
The lack of experts hurts adoption in two ways. First, there aren’t enough people working on the technology to satisfy demand. Second, the exclusivity means that it costs a lot to hire pre-existing blockchain experts.
Hopefully, the growing interest in blockchain technology will encourage more people to learn about it, which we’ve already started to see signs of, with universities like Nicosia University offering a digital currency specific MSc. Still, it will take a few years for those people to gain experience, and for companies to be willing to hire them for their blockchain knowledge.
People Are Reluctant to Change
Blockchain’s ability to revolutionize things like contracts and financial exchanges actually makes it less likely that people will adopt the technology quickly. We can see examples of this throughout history. Harvard Business Review points to TCP/IP as a good example of slow adoption.
Researchers started using TCP/IP in 1972 because the technology made it possible for them to send emails to each other. A handful of companies took interest in TCP/IP during the 1980s, but the technology didn’t become popular until the mid-1990s.
If it took more than two decades for TCP/IP to reach consumers, then we can’t expect everyone to start using blockchain within one decade of its creation.
Despite the obstacles to popularizing blockchain technology for businesses, researchers and early implementers know that it has the power to improve many of the systems and services that we rely on. It may take some time, but people will eventually use blockchain technology just as often and as easily as they check their email.