Why Blockchain Adoption In Business Is Hindered

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Some researchers claim that the state of adoption of blockchain technology today is comparable to that of the Internet in the 1990s. Diffusion should now see a boost. For example, the Boston Consulting Group predicts one billion cryptocurrency users by 2030, which would correspond to a 4% to 12.7% increase in users globally, in less than a decade.

Blockchain is an information storage and transmission technology that allows people or organizations to share a common and verifiable database in real time, without the need for a trusted third party to guarantee the authenticity and integrity of data. The blockchain works as a kind of distributed and decentralized ledger or account book, where each transaction is recorded in a chronological and verifiable way thanks to a series of cryptographic codes. This technology can be used in many fields, such as payments, smart contracts, product traceability, digital identity management, etc.

More companies are therefore considering switching to this technology to transform their operations and gain a competitive advantage. A study carried out by CasperLabs and Zogby Analytics with 603 business decision makers, located in the United States, the United Kingdom and China, indicates that 90% have already implemented blockchain. The adoption curve looks positive for 2023 since the study also specifies that 87% of the companies surveyed plan to invest in this technology during the year.

A Still Timid Use

Like the work cited above, the results of our study published in 2022 in the journal Planning Production & Control show that blockchains are attracting strong interest, but the intention to adopt remains significantly higher than the effective adoption rate. . This research aimed to understand the factors that impact the spread of blockchain, in particular by examining the role of so-called “agents of change”.

The study examined the responses of fourteen experts working in consulting firms such as BCG, PWC, Accenture, Deloitte and Wavestone as well as experts working in companies specializing in the development of blockchain solutions (SmartB, Consensys, Kapalt, ChainHero and Ticket 721).

These experts have identified the presence of several levers impacting the dissemination of this technology. Among the barriers to adoption, the so-called non-technological aspects play a major role. Thus, ethics, environmental aspects or even the lack of knowledge and expertise slow down dissemination. One of the experts interviewed points out:

“Today, we still wonder what a blockchain is. This is called technology refresh, it will come as it goes. Here we are in the construction of mental schemes around blockchains. »

Moreover, the experts agree that at this stage an adoption will be done transparently (either unconsciously) or imposed by a context of crisis such as a political or economic crisis. An expert thus recalls the South American precedents:

“In some countries in South America where the currency is failing, such as Venezuela, the inhabitants have taken their destiny into their own hands without relying on their government and rely heavily on cryptocurrency. Not because they are looking for innovation and new business models, but rather to save their families and protect their savings. »

An Essential Understanding

As for the question of ethical responsibility, it is complex and controversial. Some interviewed experts consider the technology to be neutral from an ethical point of view, while others have a more definite view, positive or negative.

The main points targeted are transparency and governance. A high level of transparency implies a high risk of exposing private data. Thus, when developing a blockchain project, it is essential to take into consideration the mode of governance, determining the actors who have access to the ledger, as well as the responsibility and authority of each. If technology is misused, who is responsible?

The question of the environmental impact of blockchain is also an important topic of debate, especially due to the use of the proof-of-work (PoW) consensus protocol. PoW requires miners to solve complex mathematical problems to create a new block. This requires significant computing power. On the other hand, less energy-intensive consensus protocols have since been developed. The use of proofs of authority (PoA) is one possible solution. The PoA follows a consensus mechanism in which a small number of trusted entities are responsible for validating transactions and adding new blocks. This process is faster and less energy-intensive (however, no comparative figures have been officially communicated).

SmartB is an example of a company developing a PoA-based blockchain. According to the company’s technical experts, a PoW-type Ethereum transaction would be 1,500 times more energy-intensive than a transaction carried out on the PoA-type SmartB blockchain. The company wishes to be part of a sustainable development perspective, thus making it possible to considerably reduce the energy impact while guaranteeing the authenticity and security of the transactions carried out on its platform.

Finally, understanding what a blockchain is and can do is essential for wider dissemination. Indeed, an innovation, however disruptive it may be, must be understood to arouse sufficiently significant interest, in order to be accepted and to provoke the phases of adoption, implementation and routinization. Without it, adoption will happen transparently (an unconscious use of the blockchain through a user-focused case) or forcedly (a crisis situation). For a more “chosen” adoption, awareness is therefore necessary, mainly provided by the agents of change that are today, among others, consulting firms and expert start-ups.

This article is originally published on theconversation.com

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