Many say that blockchain mass adoption has already started. And there is no shortage of articles which claim that blockchain will disrupt how commerce is conducted in the future and how blockchain will eliminate the middleman. Futurists also write that blcockchain will reshape how business organizations are structured and even replace humans in organizational functions.
No question that blockchain is a new and exciting technology which holds the potential to revolutionize our future. Like all other major technologies that were introduced during the past few decades such as the internet, personal computers, mobile phones, they all introduced lasting and irreversible positive impacts on our personal and business lives.
What these technologies shared in common is that they all matured following the same adoption curve illustrated below. Blockchain has already started along the same curve and is experiencing the same emotional ride as previous major technologies did.
The main trigger for blockchain technology was actually not the technology itself but the rise of cryptocurrency prices. The rise of Bitcoin price to an all time heigh in December 2017 caught the world’s attention. From that time, blockchain and cryptocurrency became synonymous and this is also where the mass adoption challenges begin.
Blockchain as a new technology holds great potential to significantly improve efficiencies in almost anything we do today. As a pure technology it has the potential to enable us to perform functions we cannot do today. As a technology, it can be adopted by businesses, individuals in any part of the world without needing to be regulated or approved.
Cryptocurrency on the other hand is different. It’s not so much about technology innovation and instead it’s more about global acceptance of different form of currency. Cryptocurrency challenges global regulations and forces the acceptance and approval by governing bodies around the world. Cryptocurrencies face a totally different set of challenges. Today there are over 2,000 unique crypto coins/tokens in the market and the number of new coins continues to rise.
According to Deloitte, as of October 2018, the total number of blockchain projects in GitHub was 6,500. In our own research, we found that at one time, the total number of crypto coins/tokens reached over 2,700. Our research also showed that the main motivation for the 2,700 blockchain projects was the easy access to capital through the ICO (Initial Coin Offering) process. In less than a year, nearly 1,000 of these projects are dead and their coins became dead coins and list is growing.
Can blockchain reach mass adoption levels in its current relationship with cryptocurrency? Not likely. Blockchain technology can begin to deliver value independent of cryptocurrency. Not sure we can say the same about cyptocurrency.
For blockchain to start the mass adoption journey, it has to be able to do so independently of cryptocurrency to gain momentum. Businesses which are considering and testing blockchain technology have no need for cryptocurrency. They see value in using blockchain more efficient transactions in their supply chain process, legal process, audits and more.
Pure blockchain technology adoption should not be saddled by the separate challenges that cryptocurrencies face. Blockchain true potential can be realized without crypto coins. In fact number of companies including Amazon, IBM and Microsoft are working to create cloud based blockchain networks with focus on creating blockchain-as-service enabling developers to set up and run blockchain networks.
In our analysis of over 1,700 blockchain projects, we looked for projects that focused on delivering business applications. We wanted to understand how these projects positioned their products to enable blockchain adoption. What we discovered was disappointing. Every single project we looked at was being built with almost total disregard of their target customer systems environments. There was an implied expectation that customers will simply switch over to their blockchain product.
This is not a realistic approach. Solution integration with existing environment is a critical requirement of all businesses. Any vendor whose solution does not integrate well will most likely lose the sale. Blockchain based solutions also face the same expectation from their target customers.
There are emerging trends that illustrate how mass adoption of blockchain technology may start. Here are few examples of where blockchain adoption is either starting or enablers are being developed.
Gaming – According to Loom Network gaming applications hold the potential to be one of the catalysts where mass adoption of blockchain may happen. Gaming systems tend to be standalone environments requiring little integration. Such environments can grow independently into bran new gaming systems.
National Blockchain Network – Australia has undertaken an initiative to build the Australian National Bockchain digital backbone that when completed, will be Australia’s first enterprise grade blocklchain network that will enable businesses to collaborate using IBM blockchain platform.
Next Generation Blockchain – Next generation blockchain protocol from Kratos Protocol holds promise of introducing an enterprise grade platform on which vendors and businesses can develop their own applications that integrate well with their existing systems. Today one of the biggest challenges that prevent blockchain adoption is the lack of interoperability between blockchain applications and blockchain and existing business systems. If Kratos is successful and we hope they are, their next generation protocol platform will help vendors build fully interoperable blockchain applications.