The technology behind Bitcoin and other digital currencies is called “Blockchain”. And it’s not only a hot topic right now — it’s also set to grow even hotter by virtually every measure going forward. Indeed, according to one report, the market for Blockchain software will increase from roughly $204 million as of 2016 to $2 billion by 2021.
In the last few years, we have witnessed an emergence of new technologies that are reshaping the way businesses operate. These new technologies include Artificial Intelligence, the Internet of Things, and blockchain. Blockchain is a decentralized ledger technology that stores data in blocks that cannot be tampered with or altered. It uses a trusted network of individuals to exchange information without intermediaries. With blockchain, transactions are faster and cheaper, with no third party required for verification.
Moreover, blockchain has potential applications across several industries including real estate, education, healthcare, and financial services. With so many potential benefits and use cases for businesses, why isn’t it more widely adopted? The answer is: the missing link holding back blockchain adoption is currently performance issues and a lack of standards across Blockchain protocols.
Adoption Issues
The primary issue preventing Blockchain from moving from adoption in test environments to production usage throughout nearly every industry is trust. While cryptography — mathematical techniques that are used for secure communication — has existed for centuries. Only recently have we seen such an explosion of its implementation in almost every possible industry. And the primary reason for this can be traced back to a digital currency known as Bitcoin.
Data is becoming increasingly centralized, making it more difficult for businesses to effectively harness and use it. Blockchain technology has emerged as a potential solution to this problem. But there remains a significant gap between its current state and its potential. For businesses to fully exploit Blockchain technology in digital transformation, this gap must be addressed.
To take advantage of Blockchain technology in future digital transformations. Businesses will need to close the gap between data generation and effective data utilization.
What is the Missing Link Holding Back Blockchain?
In today’s digital age, the concept of a central digital twin is becoming increasingly relevant. This is because it allows for the sourcing of only relevant data from connected systems, with little to no effort required from the respective domains. Additionally, automated technology brings disparate data together, structuring it to form a complete data product. Once the operational lifecycle is complete, the digital twin dissolves – providing a firm data foundation to unlock the next generation of digital transformation.
There are two core barriers to adoption that blockchain needs to overcome. Firstly, the current blockchain protocols are not designed to handle high concurrency workloads. Secondly, there is a lack of standardization in the blockchain community. These two issues are often cited as the reasons why blockchain adoption is below industry expectations. Concurrency refers to the number of transactions that can be processed at the same time. A blockchain network must be able to process thousands of transactions every second. Otherwise, the network will not be able to support the number of users that it needs to.
Why is Performance so Critical to Blockchain Adoption?
Businesses are switching from the centralized mode to a decentralized model because it is highly secure and costs a lot less. However, the decentralized model requires a huge network of computers to maintain the system and process transactions. For blockchain to be adopted, the decentralized model needs to be able to. This can only happen when the network is fast enough for all participants to be able to do their jobs and deliver value.
How Can We Address Performance Issues in Blockchain?
There are a few ways to address the performance issues in the blockchain. Firstly, it is important to use the right type of blockchain architecture for the use case. There are various types of blockchain protocols with different characteristics and use cases.
For example, if you are looking to set up a supply chain, you can use blockchain to manage the end-to-end process. Therefore, you need to choose a network that is suitable for that kind of blockchain architecture. If you have customized needs and want to build your blockchain, you can optimize the core components of the blockchain architecture to improve performance. This includes selecting the consensus mechanism and the consensus protocol.
See Also: What happens when the blockchain becomes too large
Blockchain Standards Will Be the Next Big Step Forward
Along with improving the architecture and optimizing the core components, we can also expect standards to emerge in the blockchain industry. Standards will help to eliminate a lot of fragmentation and provide a common language or platform. The Internet of Things (IoT) is a good example where standards brought interoperability and helped create a huge ecosystem. The blockchain community can learn a lot from the IoT community. When standards are created, the ecosystem becomes more open, collaborative, and standardized. This leads to better innovations, reduced costs, and more trust in the blockchain community.
Conclusion
Blockchain technology is not a fad, but a fundamental technological shift that will have a huge impact on society in the next decade. It has the potential to disrupt every industry and transform how society functions. Now, the question is: how can we as a society prepare for blockchain? If you want to implement blockchain technology in your business, you should know the challenges that blockchain is facing. You’ll need to identify the reasons behind the lack of adoption of blockchain technology and try to overcome them. Once you’ve overcome these challenges, you can start benefiting from blockchain technology in your business.
Read Also: Fix the Missing Link Holding Back Blockchain