Blockchain, touted as the revolutionary technology with expectations of its potential soaring in every field from the financial industry to healthcare sector to supply chains, is the fastest emerging technology around the world. But in my analysis, I have found that this popular distributed ledger technology that forms the basis of cryptocurrencies like Bitcoin is not devoid of barriers.
After the 2008 financial crisis, at a time when distrust in financial institutions reached its peak, the first cryptocurrency ‘Bitcoin’ came into existence. Developed by an unknown mysterious programmer Satoshi Nakamoto, this peer-to-peer, decentralised network technology created a humongous hype that it can eliminate the middleman and thereby empower its users.
Blockchain was the newest disruptive technology, seen as the solution everyone was waiting for which could clear the hurdles of every global corporate institution. Almost 84% of companies in the market to some extent involve Blockchain in their operations and have put their trust in this nascent technology.
However, I have come to believe that the obstacles it was meant to solve in the markets still remain.
Pros of Blockchain
Positive aspects of Blockchain like fast and smooth P2P transactions, tremendous reductions in costs owing to complete absence of middlemen and incredible transparency are undeniable. However, there are some issues hounding the companies which are in the discussion stages, particularly in the financial sector.
In a global survey conducted in early 2018, major revelations were found which confirm my analysis—Blockchain technology which was supposed to engender trust ironically is only making the companies confront their trust issues instead of building confidence in its users.
600 respondents who participated in the survey were business and technology executives with 31% of them work in more than $1 billion worth companies. According to 48% of the survey participants, uncertainty on the regulatory front is the number one hurdle. 45% of participants from 15 territories believe that trust is their biggest concern.
Moreover, I believe that the companies are not fully relying on Blockchain due to its inability to bring networks together. Though decentralised and distributed ledger system forms the core of this technology, it has failed to deliver in establishing connections between separate blockchains. Other top concerns are the audit issues and the security of intellectual property, which are definitely hampering the growth of the technology.
This corroborates with what I have been analysing- this decentralized technology has yet to be accepted by majority players of the regulatory environment as they struggle to find ways to come to terms with scalability which can be viewed as a potential hindrance.