Distributed ledger technology, or blockchain, offers decentralisation, security, and transparency. One of the most revolutionary and disruptive technologies of the twenty-first century is blockchain technology. Governments, corporations, and individuals have all expressed great interest in it because of its potential to establish decentralised, transparent, and secure systems. Blockchain technology is being adopted very slowly, nevertheless, despite its potential.
Obstacles to Adoption
1. Inability to scale up: Blockchain technology has completely changed the way that transactions are carried out by offering previously unheard-of degrees of decentralisation, security, and openness. Unfortunately, the network’s low scalability has made it difficult for public blockchains to embrace. Bitcoin and Ethereum are considerably behind in terms of transaction speed when compared to traditional networks such as Visa, which can process hundreds of transactions per second.
Ethereum can perform roughly 20 transactions in a second, compared to Bitcoin’s three to seven transactions per second. Since the nodes in private blockchain networks are made to process transactions in a closed environment, this lack of scalability is not a significant problem.
2.Integrity Complexity: Businesses are faced with the challenge of integrating blockchain technology into their current infrastructure. Most of the time, companies that decide to use blockchain technology have to completely revamp their current setup or come up with a way to seamlessly integrate the two systems. This is a difficult process that calls for knowledgeable blockchain developers, which are hard to get by right now.
Most organisations rely on outside parties to assist them with this integration process since they are lacking in talent. But doing this can be expensive and time-consuming. Many businesses are dissuaded from switching to blockchain technology because of the risk of data loss and breaches during the integration process.
3.Insufficient blockchain developers: Professionals with the necessary skills are in high demand due to the rapid growth of the blockchain business. The ability to create and oversee peer-to-peer networks, however, is severely lacking among those with the appropriate training. Finding competent people is difficult since blockchain technology is complicated and requires a special set of abilities and credentials. Having an adequate pool of experienced developers has become a top priority for the industry, as recent studies have shown that the demand for jobs related to blockchain has increased significantly over the past few years. The development community requires time to adjust to the constantly changing nature of technology.
4.Challenges to Privacy and Security: Nowadays, many companies abide by legally required privacy regulations. Consumers put their personal information in their hands. However, this data will cease to be private if it is all preserved in a public ledger. In this case, a consortium or private blockchain would be helpful. All of your personal data will be kept secure and your access would be restricted. While developers can create private or permissioned blockchains that let businesses control who can access their data, blockchain technology is still susceptible to cyberattacks even though it is meant to be secure. These attacks, known as 51% attacks, occur when a single entity gains control of the majority of the network’s computing power.
5.Excessive Use of Energy: Most blockchain-based systems, including Bitcoin, rely on a proof-of-work consensus method to validate transactions. Excessive processing power—roughly equal to Denmark’s yearly electricity consumption—is needed for this process. The resources needed to cool the machines cause prices to rise continuously. high energy budget as a result.
Using proof-of-stake consensus techniques, which utilise less energy than proof-of-work, is one possible remedy for this. Utilising renewable energy sources to run blockchain networks is an additional remedy.
6.Regulatory Obstacles:There are now no established legal frameworks to control the use of blockchain technology, which is still in its infancy. Adoption may be significantly hampered by this since companies could be reluctant to use a technology that operates in a grey area of the law. Nonetheless, authorities can collaborate with business executives to create precise legal frameworks that safeguard investors and consumers while simultaneously encouraging innovation. Businesses may now have the assurance they need to implement blockchain technology.
Which Solutions Have been implemented or Suggested?
1. BlockShare: BlockShare is a decentralised platform for real estate ownership that leverages blockchain technology to make real estate investing, buying, and selling more efficient. BlockShare reduces transaction costs and increases accessibility for buyers and sellers by doing away with the need for middlemen like lawyers and brokers and utilising blockchain’s inherent security, transparency, and speed. BlockShare offers a simple and secure user experience by automating important procedures like property title transfers, property maintenance, and rental income distribution through smart contracts. This blockchain-based platform could promote the widespread adoption of real estate investing by lowering costs, increasing efficiency, and enhancing security for a larger group of people, including emerging market residents and retail investors.
2.MedChain: By enabling patients to take control of their medical data, MedChain is a blockchain-based health data management platform that seeks to transform the healthcare sector. MedChain makes sure that patient health data, including as medical records, prescriptions, and test results, are safely saved and exchanged with permission thanks to blockchain’s immutable and transparent nature. Patients retain their privacy and ownership of their data while facilitating easy and safe data sharing between various healthcare organisations. Patients can provide access to their data to researchers, insurers, and healthcare providers. By enabling interoperability between various electronic health record systems, MedChain’s blockchain technology also helps to reduce data fragmentation and boosts overall operational efficiency in the healthcare industry.
3.GreenCoin: A blockchain-based platform called GreenCoin provides incentives for people and businesses to embrace sustainable habits and lessen their carbon impact. GreenCoin analyses and verifies sustainability actions, like the production of renewable energy, carbon offset projects, and waste reduction efforts, using blockchain’s transparent and verifiable ledger. Participants are rewarded with digital tokens known as GreenCoins. These coins can be traded on exchanges, used to buy sustainable goods and services, or offset carbon emissions. The blockchain technology used by GreenCoin guarantees the veracity of sustainability claims and offers a reliable forum for stakeholders—including people, companies, and governments—to interact and support environmental sustainability initiatives.
4.AgriChain: AgriChain is a supply chain network built on blockchain technology that seeks to improve the efficiency, traceability, and transparency of the food supply chain in order to revolutionise the agriculture sector. AgriChain gives farmers, distributors, retailers, and consumers the ability to trace and validate the provenance, quality, and safety of agricultural products like fruits, vegetables, and grains thanks to blockchain technology’s unchangeable and transparent ledger. This aids in lowering food fraud, guaranteeing food safety, and getting rid of supply chain inefficiencies. The blockchain technology used by AgriChain also makes equitable and open payment systems possible, giving farmers more insight into the dynamics of product demand and price.
5.EduBlock: The goal of the blockchain-based platform EduBlock is to transform the education sector by offering a decentralised, safe platform for exchanging and authenticating academic credentials. EduBlock guarantees that academic records, including as degrees, diplomas, and certifications, are safely preserved and validated by blockchain’s unchangeable and tamper-proof ledger, preventing fraudulent claims and misrepresentations. The blockchain technology developed by EduBlock makes it possible for companies, educational institutions, and students to quickly and easily validate and distribute credentials, doing away with the need for expensive and time-consuming manual verification procedures. As a result, people have more control over their personal data and the education environment is more transparent and efficient.
Conclusively, it would be naïve to think that these blockchain-related issues are not major adoption impediments. However, the learning curve that accompanies any new technology is mostly to blame for blockchain’s major issues. In order to establish a business case for implementation, advocates of blockchain technology must convince their companies to take similar risks, establish similar relationships, and make comparable sacrifices in other industries.
The list of obstacles to the widespread adoption of blockchain technology highlights the need for technological developments in light of the aforementioned problems. Industry efforts to address issues are intense. Things will undoubtedly improve if these can be fixed and the numerous barriers that presently prevent widespread adoption are lessened.