The Question Is, Can We Snub Cryptocurrency While Adopting Blockchain?
The world wide web was born in 1980 and after one decade, only 1% of information was flowing through the two-way communication network, but the usage surpassed 50%. By 2007, 97% of the telecommunication network was flowing through the internet. The internet still keeps growing larger, faster and futuristic. It took approximately three decades for the internet to dominate the world.
Now, we are witnessing and are part of another revolutionary technology i.e. blockchain that will be powering the day-to-day lives of future generations. The internet also had its fair bit of critics, but it was not as severe as that of blockchain technology, merely due to the fact that cryptocurrencies are attached to the blockchains, which has its inherent values whereas internet money was linked to national currencies.
Is Blockchain Needed?
The critics of the technology reduced considerably by 2016 -17 as the potential of the technology was getting more and more evident. The critics distanced blockchain from cryptocurrencies and started applauding its underlying technology.
Now the question is, can you adopt blockchain without the cryptocurrency being part of this?
Again, there are supporters and critics arguing whether cryptocurrency is really needed for this technology to survive.
Before analysing whether blockchain can be distanced from crypto or not, let’s first get an answer to the question, whether we need blockchain or not.
Yes, we need the technology to power our future. Blockchain needs to compete and replace our existing ‘relational database’ system which aligns information in updatable tables of columns and rows. The major constraints with this system are that the onus of updating the entries rest in the hands of one or few entities, thereby needing a trusted entity to perform the action. Blockchain, on the other hand, improvises this architecture by removing the need for a trusted party.
Now that we have ascertained that the technology is of immense potential, how do we adopt this technology into our businesses and day-to-day life.
It is a known fact that banks, financial institutions and major enterprises across the globe are either working on some concept or planning to step into the blockchain space, but the fact is that, even if we take the examples of the countries with higher technological adoption, blockchain applications and products are still on the PoC levels only.
The various factors of the community need to chip in with their contributions to enjoy the benefits of this technology during our lifespan. The major contributors to the adoption of technology are:
- Governments and regulators: This is one faction that can bring rapid adoption to the industry.
- Banks and Financial institutions: The technology is set to change the financial industry more than any other industry. With the money and resources that these institutions have, they can lead the way of adoption but the protectionism nature of these institutions prevent them from adopting transparency to the system.
- Identity authorities and certificate issuers: The technology can achieve its true capability only when each and every party on the blockchain can be identifiable (many will deny this) so that the chance of theft, money laundering and risk of market manipulation can be avoided. Identity institutions can again lead its adoption, which will give more confidence to other market sector participants with use cases.
Is Cryptocurrency Needed For Blockchain Adoption?
Even if the above-mentioned entities have started adopting the technology, the question that comes back whether the cryptocurrency should be an integral part of it?
If we are talking about trust, then yes, we will be needing the nodes and miners to do validations, which will make the cryptocurrency an integral part of the blockchain ecosystem.
The permissioned blockchain is an alternative to the above but time will prove what form of blockchain will prove to be sustainable eventually.
Factors Affecting Blockchain Adoption
The major reasons that are currently of a hindrance for the blockchain to be adopted at a faster pace by the enterprises are:
- The technology is fairly complex in nature even for the experienced developers
- The thought of storing data on everybody’s computers gives a chill to entities that handle sensitive and financial data
- Lack of knowledgeable and experienced developers
- Uncertainty in fee charged for transactions
- Spending a lot of money and effort on an infrastructure (public blockchain) on which you do not have any control.
In order to overcome all the above hurdles, we need to understand and adopt one major advantage of this technology, ‘the way in which how we trust each other for business transactions’. Due to the consumer’s increasing adoption of a digital lifestyle, every business must change how it operates and interacts with customers every day. There is no choice left for the businesses but to adopt the technology to stay in the business.
Hence, rather than trying to change the world, the businesses should start with smaller applications on blockchain and try and implement the same into their day-to-day business processes. This will eventually lead them to understand how the technology behaves and how it can fit into their business.
What is seen in the current blockchain ecosystem is that everyone is in a race to find the elusive killer applications on it, that can give a fortune. Hence even the biggest of tech firms are still reeling with their PoCs without having much solid use cases implemented and used.
Whether we will enjoy the benefit of the powerful blockchain technology within a short period of time will depend on whether the enterprises will start building smaller applications to solve their inherent trouble points.
