Blockchain goes mainstream – hype or reality?

including limited interoperability, security concerns and a lack of regulation, experts have said.

Blockchain is a type of digital ledger technology where data is stored in the form of “blocks” that are strongly linked together through cryptography.

Tran Thien Duyen, CEO of Techfarm Technology JSC, told Việt Nam News that “blockchain technology is more than just cryptocurrency; it is a revolutionary way to track transactions”.

By reducing information asymmetries and transaction costs, blockchain can help businesses, especially small businesses, overcome long-standing challenges related to scale, opacity and lack of business history, according to Duyen.

“While still in its infancy, blockchain is being adopted for a variety of business uses and is likely to serve a wide variety of purposes in the future.”

Nguyen Dinh Phuc, co-founder of blockchain company SotaTek, said many Vietnamese developers were talented and open to new technologies.

“They can soon help bridge the gap between business and blockchain technology in a short period of time. It is one of the major competitive advantages Vietnam has compared to other nations.”

Challenges

However, one of the biggest challenges preventing blockchain from becoming mainstream is limited interoperability – the ability to share and access information across different blockchain networks without intermediaries.

“There is no universal standard to allow different blockchain networks to communicate with each other, and blockchains use different encryption methods, so it is difficult to transfer data securely from one to another,” Phuc explained.

Duyen said this made mass adoption of the technology challenging, but developers around the world tried to solve this problem with interoperability projects like Polkadot and Cosmos to connect multiple blockchain networks.

Another issue is related to security despite blockchain’s reputation as safe and secure. There have been several infamous crypto hacks, such as the hack to steal $625 million worth of cryptocurrency from video game Axie Infinity’s Ronin network in March of this year.

Decentralized finance programs (financial services that do not use traditional intermediaries such as banks) are public and use open source code, which is available for anyone to see.

“Hackers can study the code to find exploitable vulnerabilities and steal cryptocurrency,” Duyen said.

Harpreet Singh Maan, CEO of Malaysian blockchain company Blocklime and chairman of the ACCESS Malaysian Blockchain Association, said: “Blockchain is among the most secure ways of doing business and most of the hacks that are successful are often due to negligence, poor coding practices and poor security procedures by startups/companies, and not a direct failure of the technology.”

More education on risk management and proper standard operating procedures should be provided to companies, he said.

The lack of a regulatory framework is an obstacle as well as playing a key role in helping blockchain become mainstream.

Nicole Nguyen, ASEAN Deputy Chair of the Global Impact Fintech Forum, said: “Vietnam continues to take a neutral stance on the technology itself, recognizing the importance of blockchain in elevating the country’s position in the regional technology landscape.

“There needs to be a refined regulatory framework around blockchain to empower more mainstream applications in Vietnam.”

Maan said regulatory frameworks were important, but if the regulatory regime is inexperienced in blockchain, they could hinder development.

He proposed an open, collaborative and flexible regulatory sandbox to help the industry develop.

On September 23 and 24, a global blockchain conference, BUIDL Vietnam 2022, will be held in HCM City’s Independence Palace.

Experts from Vietnam and other countries will discuss developments in blockchain technology and the host country as an emerging blockchain hub, particularly focusing on solutions to help the technology become mainstream.

Visitors can register for the conference at www.buidl.asia.

Source: Vietnam News