“Anything that can conceive of as a supply chain, blockchain can vastly improve its efficiency- it doesn’t matter if its people, numbers, data, money.” ~ Ginni Rometty, CEO IBM
Realising the future potential that blockchain may hold, numerous blockchain-based PoCs (proofs of concept) have been executed, validated, and presented across the country over the past two years. Telangana, Karnataka, Kerala, Maharashtra, and Andhra Pradesh are some Indian states that have been aggressively pushing the blockchain agenda, organising hackathons and conferences on the topic and implementing blockchain-focussed projects.
However, as the Karnataka Minister for Social Welfare Priyank Kharge (formerly IT/BT Minister) said on the sidelines of a blockchain conference, last year — “Blockchain is something that everybody is counting on, still we don’t know what will come out of it” — there is a series of roadblocks that are still blocking the road to the development of Blockchain in India.
In this context, Inc42 recently also published a comprehensive report — the Blockchain Technology Report India 2018 — which analyses the market potential and applications of blockchain in great detail along with demystifying the technology and elements associated with it.Download The Blockchain Report Now
Meanwhile, let’s take a look at the challenges and roadblocks in the adoption of Blockchain in India.
Blockchain in India can be a Costly Affair
Switching to blockchain technology for any business or organisation isn’t easy. Its primary application — cryptocurrency — is undoubtedly a better and cheaper way of making payments than your regular fiat currency and self-executing contracts in smart contracts’ applications, this might not be true for all. While cryptocurrency has already been tested and adopted widely, many other blockchain applications are yet to be realised and executed. For instance, blockchain adoption in banking demands not only execution of PoCs but will require banks to hire blockchain experts and execute the PoCs at large scale.
And, hiring blockchain experts as well as data scientists is much costlier than hiring software developers.
Where Is The Money?
For corporates which usually prefer to adopt a long-term strategy, it could be easy and viable to adopt blockchain-based solutions developed by blockchain startups at their own expense. However, some of the biggest applications of blockchain lie in public frameworks such as Bitcoin and Ethereum, where numerous related parties can hop on the blockchain and make transactions, but the process involves expenditure on validation and maintenance of the blockchain.
In the case of Bitcoin, for instance, it is the mining that provides rewards to miners against the Proof-of-Work (PoW) that they do. Mining is an essential peer-to-peer computer process used to secure and verify Bitcoin transactions on the blockchain and miners play an essential role in blockchain maintenance work.
However, for other public blockchain-based applications, it’s still not clear who will bear the cost incurred in the maintenance of the entire network and the validation of transactions.
It’s Hard To Love Blockchain And Hate Crypto!
Unlike Japan, the US, Australia, and many other countries, India’s blockchain development has been caught in a Catch 22 situation where the central government and central banks want to promote blockchain projects but not cryptocurrencies, initial coin offerings (ICOs), and crypto-tokens.
In the last couple of years, cryptocurrencies and ICOs have become an essential means to raise funding. Besides serving as a payments method, cryptocurrencies also help execute PoW.
Similarly, ICOs help generate funding for blockchain startups. However, the Indian tax and banking authorities are not in a happy place with cryptocurrencies and ICOs. ‘
Hence, a number of blockchain projects initiated by startups could not be executed owing to the government’s hate affair with crypto and ICOs.
Inc42’s Blockchain Technology Report India 2018 explores some blockchain projects that were immensely successful owing to the same ICOs and cryptocurrencies that the Indian government is shunning.Download The Blockchain Report Now
Where Are The Blockchain Minds?
Telangana, Andhra Pradesh, and some other states have joined hands with blockchain startups established abroad for implementation of blockchain in various fields, including e-governance, on a pilot project basis. This cites the lack of blockchain startups with the right skills in the country.
Right now, blockchain is one of the hottest expertise/skillsets to possess in the world. With the supply of resources skilled in blockchain being low and the demand high, Indian developers who want to work on or with the technology are gradually shifting abroad. A survey of over 100 developers conducted by blockchain community Incrypt revealed that more than 80% of the blockchain developers in India may move abroad in search of better opportunities due to the lack of a “robust regulatory framework” in the country on Blockchain technology.
Further, leading institutes such as IITs are still in the process of offering blockchain-based courses. Hence, people are still dependent on various online/offline blockchain-based training programmes that are not able to meet the demand either in terms of quality or quantity.
You’re Ready To Adopt Blockchain, But Are The Others?
A blockchain is distributed ledger technology that digitally and chronlogically records transactions that take place between two parties. Even if banks, governments, and other organisations (educational institutes, hospitals etc), are ready to adopt blockchain for its various possible applications, it is important to know whether the other parties — vendors — know the technology well enough to trust in.
For instance, Inc42 had earlier spoken to small supply chain players who extend their services to corporates and logistics companies. These small players, who lack an understanding of blockchain, were unwilling to adopt any new solution despite facing issues in their current payments system. This is largely due to lack of awareness on the potential of the technology.
Spreading awareness on blockchain is just one among many issues that the government, the blockchain community, and other stakeholders such as corporates and institutes will have to work on in order to pave way for blockchain-based solutions in India.
The Inc42 Blockchain Technology Report India 2018 is an effort in exactly this direction — seeking as it does to decode blockchain for pros and n00bs alike.Download The Blockchain Report Now