Blockchain: With So Much Promise, Why the Slow Pace of Adoption?
The pandemic had already raised questions about the world’s dependence on an economic model that has broken trade barriers but made countries heavily interdependent – Copyright AFP John MACDOUGALL
Blockchain technology has made waves in various industries. The concept, especially for supply chains, promises increased efficiency, transparency and security. Despite its potential, the technology is often misunderstood and plagued by a “blockchain bias.”
This is something that has been discovered by the founder of the blockchain storage company Züs, Saswata Basu. The technologist is keen to address the misconceptions surrounding this innovative technology, as he explains Digital Journal.
According to Basu, there are six important reasons behind the “blockchain bias”. These are:
Lack of understanding
According to Basu: “Many people are intimidated by blockchain technology because it is a relatively new concept and often misunderstood. Despite the complex underlying technology, the basics of blockchain are quite simple: it is a linked list of transactions that is an immutable and transparent way of payments and activities across a distributed ledger without reliance on third-party services or trusted entities.
Security concerns
People may fear that blockchain technology has too many security weaknesses and can be easily exploited by malicious actors. With this Basu counters: “In reality, however, blockchain technology is one of the most secure options available today, as data stored on the blockchain is incredibly difficult to manipulate or tamper with in any way.”
High costs of implementing blockchain
Basu acknowledges that the equipment and energy costs involved in running a blockchain system can be quite high. This is: “Due to the need for specialized hardware and software resources required to maintain the network”
But when costs are balanced, Basu observes, “Recent blockchains are efficient and can use the same power as your laptop to operate a node on the chain.”
Scalability issues
Due to its decentralized nature, scaling up a blockchain network can be difficult as more participants join the network and require additional resources such as storage space or computing power.
There are solutions, Basu explains: “Innovations like sharding help solve this problem and make scalability much easier for all types of projects, from small startups to large enterprises.”
Lack of regulations
Although governments around the world have taken steps to regulate cryptocurrencies and other related technologies, there is still no clear global framework to govern these systems.
While this may cause some confusion among potential users who don’t know what rules they have to follow when using them, Basu reassures: “There has been some guidance based on SEC actions in a few categories such as DeFi and Staking projects.”
Adoption challenges
Despite its many benefits, the adoption of blockchain technology has been slow due to unfamiliarity with its concepts and applications, as well as a general lack of awareness of how it can benefit businesses or individuals on a practical level.
This will change notes Basu: “As more people become aware of how transformative blockchain technology can be for certain industries, we should expect to see increased adoption over time.”
