Although there are many different challenges for this technology, blockchain’s future looks bright. At the moment, the cryptocurrency and blockchain community is waiting for a Bitcoin (BTC) ETF that would allow the industry to be attractive to many new investors. With a Bitcoin ETF, the purchase and trade of BTC will be simplified, something that could help virtual currencies to reach mass adoption.
At the end of 2017 and the beginning of 2018, the number of blockchain projects and proposals in the market reached a record. And in the future, new and more innovative projects are going to be developed.
According to a survey conducted by Gartner, 65% of Chief Information Officers (CIOs) said that their organizations were engaged with potential uses of blockchain technology. At the moment, just 1% of organizations have invested and deployed blockchain technology solutions in their daily operations. This shows that there is a very big gap between companies experimenting at some extent with distributed ledger technology (DLT) and those that have already implemented it.
It seems that there are some issues that are not allowing companies and enterprises to start working and implementing this technology. Apparently, there are four different challenges for the technology to succeed, a lack of widespread information, regulatory concerns, scalability issues and security.
Most of the companies and those in charge of implementing blockchain technology do not have the necessary knowledge to implement it. As it is a very new technology, there are still individuals that do not understand how smart contracts, distributed networks and encryption work so as to implement it in an enterprise.
Furthermore, the regulatory framework around virtual currencies is still far from being clear. Several countries are trying to regulate the virtual currency market, but blockchain technology is still operating without the necessary regulatory clarity. In general, it would be easier to avoid using the technology rather than investing in being compliant in a regulatory environment that can change at any moment.
Additionally, there are some scalability issues that need to be solved before companies start to invest in blockchain technology. In general, public blockchains are not being able to support high transaction volumes or an increased amount of users on the platform. Indeed, Bitcoin and Ethereum (ETH) are perhaps the most affected blockchains in the market. However, these two projects are being enhanced and improved so as to be able to handle a larger number of users and transactions each second. Although centralized and permissioned networks tend to be faster, the challenge of handling thousands of users per minute remains an important issue.
Another thing that is affecting blockchain adoption is the security they have. Although they are considered very useful because of their security level, blockchains have yet to solve an inherent risk related to the interface between users and the network. If there are more than 51% of miners controlling the network, there could be a double-spend problem with the coins that are used in this network. Earlier this year, the Bitcoin Gold (BTG) network experienced a 51% attack that resulted in millions of dollars lost.
In order to allow individuals to know more about this technology, it is possible to start a blockchain course at any university around the world offering crypto and blockchain-related programs. This would help experts learn and understand better how the DLT world works and how it can be implemented in large-scale projects. Nevertheless, not all the information provided is useful. It must be clear and allow companies to embrace it in real-world use cases. A friendly user interface, architecture and functionalities will help enterprises start working with it.
Although there are many different challenges that the industry needs to face, they are not impossible to tackle. Time will allow the blockchain space to become more mature, regulated and clear for those interested in using DLT systems. There is a very important cryptocurrency community that will play a very important role in trying to educate and spread the word about blockchain technology.
As innovation improves, developers will be able to focus more on innovation and user-friendly interfaces. If that’s achieved, blockchain will be a step closer to mass adoption all over the world.