There’s no doubt blockchain is growing aiming to gain additional popularity. The research firm Gartner Inc. forecasts a $176 billion industry. Tech giants IBM and China’s Alibaba are approaching a combined 200 blockchain patents. Still, there are several hurdles preventing many businesses from getting on board.
Blockchain is still Gaining Popularity
Understandably, not every business wants to accept a new technology before it’s standardized. It was no different with the internet in the early and mid 90s.
While many were certain it would catch on just as it did, it was still prudent for many businesses to wait for the technology to grow and gain a positive reputation. Considering the blockchain, currently scalability is still highly debatable, and many different protocols are in the running to produce the best solution.
Secondly, not everyone wants that level of automation
Additionally, while human error can be a huge problem in operations, automation has its risks as well. The self-execution of smart contracts and machine learning capabilities based on the ledger have great potential. But at times, it can simply be very helpful to have a person or group with the power to make necessary changes.
This is the crux of an overall debate concerning blockchain that threatens governments, banks, and other institutions. At the most basic level, for some it’s simply too scary and risky to give up this level of control just to gain some technology that is foreign to them.
Finally, there’s not always just one business that is directly affected by a change in operations
If you have a farmer delivering lettuce, he and every business involved in the supply chain will have to comply. For a big company like Walmart, compliance is much easier to gain. This is because maintaining the retail relationship is obviously in the best financial interest of all parties involved. However, for smaller businesses such a switch could be a nightmare. And despite long term saving potential, the up front costs could be very high to gain a small reward. Similarly, in China the government, and not a company, is often in control of such projects. This is a big reason for the high acceptance of the blockchain in the country.
Still, it is hugely beneficial for big name corporations like IBM, Microsoft, Walmart, JP Morgan, Amazon, and Starbucks to adopt blockchain. It’s logical that these businesses can afford the risk for the potential rewards of being ahead of the competition.
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