Clear­ly, the ben­e­fits of adop­tion will have to out­weigh the costs. And they promise to be con­sid­er­able.

6 min read

Opin­ions expressed by Entre­pre­neur con­trib­u­tors are their own.

Wealth man­age­ment. Improved secu­ri­ty. Flu­id trans­ac­tions: You’ve like­ly seen these ben­e­fits of blockchain tech­nol­o­gy tout­ed before now. And there are more.

Relat­ed: 9 Blockchain Influ­encers for You to Fol­low — Who All Hap­pen to Be Female

Indeed, the blockchain rev­o­lu­tion is under way in many sec­tors. And it’s only a mat­ter of time before your indus­try is affect­ed, if that has­n’t hap­pened already. Still, while blockchain tech­nol­o­gy promis­es to enable seam­less trans­ac­tions for entre­pre­neurs, its adop­tion has been any­thing but.

The rea­son is that, as hap­pens in most rev­o­lu­tions, this one about the adop­tion of the blockchain won’t be won with­out a fight. Even more so, mass adop­tion of blockchain tech­nol­o­gy by entre­pre­neurs will present them with cer­tain chal­lenges they must first over­come.

Yet if the notion of “chal­lenges” por­tends gloom and doom for you, rest easy; it shouldn’t, because these chal­lenges are neg­a­tive­ly affect­ing the entire blockchain rev­o­lu­tion at the moment. Con­sid­er the fol­low­ing.

1. Resistance to change

The Ger­man physi­cist Georg Christoph Licht­en­berg is reput­ed to have said, “I can­not say whether things will get bet­ter if we change; what I can say is they must change if they are to get bet­ter.”

Entre­pre­neurs adopt­ing blockchain in some indus­tries will face an avalanche of resis­tance from their peers and oth­er gate­keep­ers. For­get about the tech­nol­o­gy’s pro­posed ben­e­fits; some entre­pre­neurs will just not buy into the idea, and even more so, buy into the notion of reg­u­la­tion.

Ilgor Tely­at­nikov, pres­i­dent and chief oper­at­ing offi­cer of Alpha­point, described this issue, say­ing: “The pri­ma­ry chal­lenge for the broad­est adop­tion of blockchain tech­nol­o­gy is reg­u­la­tion. The reg­u­la­to­ry envi­ron­ment has not caught up to inno­va­tion and in many cas­es pre­vents or slows the adop­tion …

“As the reg­u­la­to­ry frame­work becomes more estab­lished,” Tely­at­nikov con­tin­ued, “more prod­ucts and ser­vices that main­stream con­sumers use will uti­lize the tech­nol­o­gy, though in many cas­es con­sumers won’t be aware of the change.”

Relat­ed: Trends the Fin­tech Indus­try Should Adopt in 2018

Entre­pre­neurs in high­ly reg­u­lat­ed indus­tries may need to wait for new reg­u­la­tions to be writ­ten for their indus­try before they can safe­ly adopt blockchain. Addi­tion­al­ly, due to the tech­nol­o­gy’s much-laud­ed trans­paren­cy, reg­u­la­tions gov­ern­ing infor­ma­tion-shar­ing may be need­ed to pro­tect com­pa­nies, investors and cus­tomers. That’s not even men­tion­ing issues with banks and reg­u­la­to­ry com­pli­ance.

2. Poor education

Blockchain tech­nol­o­gy is still in the nascent stage. Though aware­ness of it has increased, many entre­pre­neurs and con­sumers are still obliv­i­ous. Among those who are aware, there’s still a lot of mis­in­for­ma­tion. As an exam­ple, many folks don’t yet know that blockchain tech­nol­o­gy has oth­er appli­ca­tions out­side finan­cial trans­ac­tions and cryp­tocur­ren­cy.

Prop­er edu­ca­tion, then, needs to address  ques­tions like What is blockchain tech­nol­o­gy and how does it work? And: Apart from finan­cial trans­ac­tions, how can it be applied to busi­ness oper­a­tions? Entre­pre­neurs will also need to learn about the lim­i­ta­tions or dis­ad­van­tages of adopt­ing blockchai, because let’s face it, it’s not a per­fect sys­tem, at least not yet.

For entre­pre­neurs eager to learn about invest­ment in blockchain and the cryp­tocur­ren­cy space,  Covest­ing is build­ing the nec­es­sary infra­struc­ture. Apart from copy trad­ing, the com­pa­ny is build­ing an all-round cryp­to-intel­li­gence por­tal. More efforts like this one are need­ed to pro­duce more blockchain-lit­er­ate entre­pre­neurs.

Learn­ing about blockchain’s lim­i­ta­tions  is impor­tant because it’s easy to get car­ried away by the ben­e­fits and for­get the draw­backs. Some entre­pre­neurs I’ve spo­ken with, for instance, are are so pos­i­tive about the tech­nol­o­gy, based on what they’ve read, that they lit­er­al­ly believe it will address all the prob­lems they’re fac­ing in their busi­ness.

That’s a dan­ger­ous assump­tion.

For exam­ple, blockchain tech­nol­o­gy used in indus­tries with sen­si­tive data could be a prob­lem due to its trans­paren­cy. The blockchain used in those instances will have to be cus­tomized so that peo­ple have access only to the infor­ma­tion they need for car­ry­ing out their tasks. Until this hap­pens, pri­va­cy and secu­ri­ty will remain valid hin­drances to adop­tion. 

In short, no one tech­nol­o­gy offers a one-size-fits-all solu­tion to any­one’s busi­ness woes, and blockchain tech­nol­o­gy is no excep­tion. 

3. High setup costs

If you’ve read arti­cles laud­ing blockchain tech­nol­o­gy, you’ve prob­a­bly read at least one describ­ing reduced set-up costs as a poten­tial blockchain ben­e­fit. Clear­ly, set-up costs need to be con­sid­ered up-front, and the details may not be pret­ty.

Travis Kei­th, a blockchain con­sul­tant at NXT Foun­da­tion, for exam­ple, has said that, “Even if more peo­ple are aware of blockchain and its capa­bil­i­ties, the resis­tance to chang­ing exist­ing sys­tems due to the costs, to uti­lize this new tech­nol­o­gy, is anoth­er one of the sig­nif­i­cant bar­ri­ers to main­stream adop­tion.

“It’s even hard­er for larg­er cor­po­ra­tions, which are less agile and thus have high­er costs when mak­ing such changes,” Kei­th said. “The ben­e­fits of adopt­ing blockchain tech­nol­o­gy will thus have to great­ly out­weigh the costs of this shift in order to jus­ti­fy going through such dif­fi­cul­ties.”

Specif­i­cal­ly, blockchain tech­nol­o­gy has to be cus­tomized for each busi­ness, depend­ing on its needs. Build­ing soft­ware is gen­er­al­ly expen­sive in itself, and mak­ing a new hire may cost you a for­tune if you’re run­ning a small busi­ness with a small­er bud­get.

Anoth­er issue? Blockchain tech­nol­o­gy experts are few and far between, and you’ll have more mon­ey prob­lems on your hands com­pet­ing with oth­er com­pa­nies for lim­it­ed tal­ent. You may also have to spon­sor train­ing just to get your staff up and run­ning on the new tech­nol­o­gy.

Evolving challenges 

Blockchain tech­nol­o­gy is still in the ele­men­tary stage. That’s caus­ing most of the prob­lems behind its mass adop­tion by entre­pre­neurs and the gen­er­al pub­lic. Give it some time, how­ev­er, and increased pop­u­lar­i­ty will change the pub­lic’s per­cep­tion and reduce set-up costs as more qual­i­fied experts emerge to han­dle the prob­lems.

Relat­ed: 4 Ways Entre­pre­neurs Are Tak­ing Cryp­tocur­ren­cy Main­stream

Mean­while, if you plan to use blockchain for your busi­ness, con­sid­er the advan­tages, dis­ad­van­tages and long-term ben­e­fits. Above all, don’t for­get Keith’s words that, “The ben­e­fits of adopt­ing blockchain tech­nol­o­gy will have to out­weigh the costs of this shift in order to jus­ti­fy going through such dif­fi­cul­ties.”

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