The internet era vs Blockchain era
A couple of decades ago, internet inroaded to our lives and we didn’t have any clue at that point in time that 24×7 we will be glued to this technology and it was equally impossible to think that a disruption to this technology service can bring to the world to a standstill.
Internet and its related services had a relatively higher degree of trust issue as compared to the blockchain adoption I would say. The millennial generation would think that the world is taking too much time to adopt blockchain technology, which might not be the case. Blockchain technology was widely discussed in 2013-14, debated in 15-16, billions started coming in by 2017 and we are standing at over $500 to $800 billion markets by now. That too without any major giants backing up the technology and the cryptocurrency in it entirety. As compared this, the internet took a much longer time to gain access to the day-to-day operations.
When even to make a phone call, people had to travel to a phone booth, it was a tough job for the telecom companies to sell mobile connections to the general public. The concept of allowing users to access banking operations through the public internet was an equally dreaded idea for the banks. Many of the nationalized banks took a pretty long time to finally accept this reality.
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 3 decades for the internet to dominate the world.
Now we are witnessing and are part of another revolutionary technology 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 blockchain reduced considerably by the year 2016 -17 as the potential of the technology was getting more and more evident. The critics distanced blockchain from cryptocurrencies and start applauding the underlying technology.
Now the question is, can you adopt blockchain without the cryptocurrency being part of this?
Again, there are supporters and critics to the fact that whether cryptocurrency is really needed for blockchain technology to survive.
Before analysing whether blockchain can be distanced from Crypto or not, lets first get an answer to the question, whether we need the 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 to 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 in to 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:
1. Governments and regulators:
This is one faction that can bring rapid adoption to the industry.
2. Banks and Financial institutions:
The blockchain is set to change the financial industry more than any other industry. With the money and resources, what 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.
3. Identity authorities and certificate issuers:
Blockchain 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 the blockchain adoption, which will give more confidence to other market sector participants with use cases.
Is cryptocurrency needed for blockchain adoption?
Even if the above entities have started adopting the technology, now the question 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 sustains eventually.
Factors affecting blockchain adoption
The major reasons that are currently of 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 blockchain developers
- Uncertainty in a 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, we need to understand and adopt one major advantage of the blockchain, ‘the way in which how we trust each other for business transactions’. Due to the consumer’s increasing adoption of 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 in to their day to business process. This will eventually lead them to understand how the technology behaves and how it can fit in to their business.
What is seen in the current blockchain ecosystem is that everyone is on a race to find the elusive killer applications on the Blockchain, 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.