Blockchain has several problems that keep it from being used.
It’s got a bad reputation. Like the early internet which was just bulletin boards and dial-up email services by social outcasts and dissidents, or PCs when they were complicated machines for computer nerds to play games on, blockchain has a stigma. Cryptocurrency, which is synonymous with useless digital coins, scammers, and criminals.
It’s a foundational technology. It’s a different way of doing what we already do, and as a result, it’s difficult to see the benefit of using it in enterprise settings (or any setting). This is the same problem you saw with electrical power, wireless communications, and integrated circuits. These innovations didn’t improve on status who, they created a totally new way of doing what people were already doing. Their first iterations sucked. But forward-thinking, ambitious, well-funded, committed people developed groundbreaking applications that shifted notions of what’s possible. (Lightbulb, radio, personal computers)
As best I can tell, all enterprise solutions are pitched as permissioned blockchains. If you already know and trust the people you’re dealing with, blockchain just decentralizes your existing databases and processes. That may have benefits…but it’s not really the core value of blockchain. Blockchain enables you to transfer ownership of things to strangers with certainty you’re going to get what you expect. This has enormous implications for peer-to-peer interactions. Business by and large have already found ways to accomplish the same result, albeit at great cost and risk. So if you run a business, are you going to change your systems, renegotiate your contracts, retrain your employees, and eliminate a big chunk of your business on a leap of faith in public blockchains? No, you wait until the tech matures a bit, see where others have been successful, and then adapt. You risk ceding the future, but you’re hoping you can quickly catch up. Meanwhile, you’re still able to deliver for your clients and customers, which is all they care about.
Average people find it too complicated. Many won’t take 2 minutes to set up an online bank account, and won’t lift a finger to set up a Netflix account - you think they’re going to spend 5 minutes creating bitcoin wallets? AND store their keys properly?
Nobody uses cryptocurrency for normal purchases. You either use it to secure a stake or access to a blockchain, or you trade it.
Scalability is a problem. Non-permissioned blockchains can’t handle large volumes of transactions. Several projects — Cardano, for example — are working on fixing this by adding processing layers or moving large chunks of transactions off the blockchain. If even one of these works, it will be a game-changer. As yet I haven’t heard of any solution that’s been rolled out.
What do you think?
Do you agree?
