- The present and future promise of blockchain technology
has captivated a sizeable community
of global enthusiasts and advocates.
The unique qualities of the software
to solve difficult and complex issues,
the innovative applications being deployed
and its legions of users reflect the value
that blockchain has already brought to the table.
In the last couple of years,
business leaders have moved from a wait and see approach
to recognizing that they must move forward
and invest in blockchain efforts
to support their operational and market strategies.
Despite this optimism,
executives still point to some valid uncertainties
and challenges that are muting broad and rapid adoption.
In a recent survey of 600 executives
by the global consulting firm PwC,
a significant percentage
of respondents said their organizations
had some form of involvement in blockchain technology.
Let's break down the numbers.
Within these organizations,
14% had no projects underway,
20% were in the research phase
and 7% were paused in their efforts.
Together, this represents already 41% of organizations.
30% were in some phase of developing a project,
10% were piloting and finally,
only 15% were live with the project.
While this data isn't too bad,
and I'd argue it's quite encouraging,
it's also indicative of some hesitancy.
The PwC survey identified a number of barriers to adoption.
Those barriers included regulatory uncertainty,
lack of trust among users,
interoperability limitations, and scalability issues.
A similar survey conducted
by global consulting firm Deloitte
of 1,500 senior executives identified three top reasons
for hesitant adoption of blockchain technology.
The challenges of implementation,
particularly related to integration
or replacement of existing systems.
Regulatory issues, and finally, fear of security threats.
A theme that runs throughout blockchain adoption hesitancy
is a lack of trust in the technology.
It's painfully ironic because trust
is at the core of blockchain's true unique value.
So what are these trust issues and concerns
of business leaders?
One of these concerns
is that the technology is still emerging.
As with all new technology,
there are doubts about stability,
reliability, scalability and security.
Leaders comfortable with older, tried and tested methods
can be concerned about moving important processes
to a new platform.
They are worried about the absence of regulations and laws,
and what that might mean for potential legal exposure.
These are not irrational concerns.
Despite blockchain's claim of being reliable
and tamper proof, there have been notable failures
and breaches including sizeable thefts
of cryptocurrencies from big name exchanges.
Blockchain technology also continues
to lack standardization,
such as interoperability with other blockchains.
It's good news though that progress
is being made in this area.
Perhaps the area contributing the greatest
towards the gap in trust
is a lack of understanding
at the senior decision level
about what blockchain is,
and what value it can bring.
For too many, blockchain means cryptocurrency,
and more often than not, specifically, Bitcoin.
To be fair, explaining blockchain isn't easy.
And with limited time and patience,
many business leaders haven't made it a priority
to deeply appreciate the possibilities
that technology can bring to their enterprise.
Doubts and reservations about new technology
are not new and can often be viewed as a positive.
These are forcing functions
that can help to ensure weaknesses are addressed
and trust issues are overcome.
As Kevin Kelly notes in his 2016 book, "The Inevitable,"
when executives were first introduced
to the promise of the internet in the 1990s,
many discounted it.
They said that consumers would never trust it
for buying products
or for meeting their banking needs.
Many thought that content would rename the domain
of powerful media companies.
Many leaders could not see the disruption
that was to come.
Sometimes it feels this way with blockchain technology.
It has massive potential
and the leaders and organizations
that are ready to invest now
will most likely reap the early rewards.