In a report by Zage titled, “Real-World Applications of Blockchain,” Dan Weinberger, Co-founder, and CEO of MORPHEUS NETWORK, says that “distributed ledger technology (DLT) has the same transformative power as the internet had in the early 1990s.”
Most experts in the report agree with Weinberger on the fact that the current state of blockchain can only be compared to where the internet was in the 90s. This means blockchains at the moment are slow and full of complicated processes that make mass adoption difficult.
Just as the internet was underrated in the early 1990s nobody can accurately predict blockchain’s impact. Even then, everyone is eager to know when the technology will hit its tipping point for mass adoption. Here is a breakdown of some of the challenges that the Zage report addresses in order for a blockchain revolution to occur.
Julian-Andre Winter, head of asset management at The Naga Group, believes that “regulation is the first key for establishing blockchain technology at it will provide the lacking level of trust.”
To date, there are still reports about fraudulent ICO companies in the blockchain industry. Such cases make people skeptical of blockchain-related startups. Plus, even though the blockchain technology is built on principles that advocate for freedom and autonomy, supportive regulation can accelerate mass adoption and build trust with the masses.
Christian Ellul, director at E&S Group, agrees that “regulation would bring mass adoption.” He adds that the industry “needs common standards to make the digital space more easily accessible.” According to Ellul, regulation will facilitate “mass education and the development of regulatory frameworks in major countries” thus bringing world markets together.
At the moment, there is progress in terms of regulation in the US with 17 states passing bills related to blockchain adoption. However, uncertainty remains as existing regulations do not cover smart contracts as of yet.
Speed and ease of use
The current process of buying cryptocurrencies requires you to have a wallet and go through a list of complicated steps to make the transaction complete. Compared to existing cross-border payment alternatives, decentralized applications that use blockchain technology have processes that are complicated for the average user.
There is also a high barrier to entry even for developers looking to create new blockchain-based applications. Furthermore, reports indicate that the current blockchain transactional speeds are slow. Take the ethereum blockchain, for instance, it can only handle 15 TPS and bitcoin’s blockchain can only handle 7 TPS.
Therefore, there is a great need to implement easy-to-use, plug-and-play user interfaces (similar to existing mobile and web application) while speeding up performance to allow various people to get comfortable using and developing blockchain applications.
Simplifying set up processes and integrating faster and easier-to-use interfaces will allow users to understand the non-technical value that blockchain offers. Chris Hart, COO at Civic technologies puts it clearly when he says that “the industry will hit a tipping point when people have the opportunity to use blockchain-powered technology daily and understand the non-technical benefits of the technology.”
When you think about it, there is no need for consumers to know how blockchain works. A good analogy would be the computers of the 40s, and 50s. At the time, you would need a computer that would fill up an entire office just to crunch some numbers. Nowadays, companies like IBM are creating computers with blockchain capabilities the size of a grain of salt.
Mass adoption does not depend on people’s understanding of how blockchain works. After all, most people will resist change or the need to learn new ideas. Therefore, the more subtle the changes they have to make the more likely they will adopt new technology.
Allen Lee, the founder of QLC chain, believes that “the day blockchain technology is used in day-to-day life is the day when people stopped talking about blockchain.” Just as internet users don’t need to understand TCP/IP protocols, blockchain users don’t need to understand what powers blockchain as it is a backend technology.
Apart from the above-mentioned challenges, proof-of-work blockchains still have to achieve efficiency in terms of energy consumptions. Other hurdles include achieving interoperability and establishing standards for collaboration to speed up development.
Matt Harding, the head of blockchain marketing for Zage, said, “The time of easy ICOs has passed, and now real projects with real use cases that add value to users’ lives can flourish and show the substance beyond the hype.”
Chuck Ng, CMO at Project PAI, believes that the public’s faith in blockchain value plus additional clarity in regulation and increased scalability are the three most important factors that will drive mass adoption. Hopefully, all these challenges can be addressed with time for mass adoption to occur.
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