After working with enterprise blockchain technology for over three years, I am becoming a little frustrated with its rate of growth. While there is evidence of growth, there is still too much holding this technology back.
In its March report, IDC shared some positive findings for enterprise blockchain adoption, stating that in many cases, the use of blockchain has returned better results than the status quo. The firm said it expects blockchain spending to increase through 2022, with total spending reaching $12.4 billion that year. The report also noted that the technology is maturing rapidly and implementations of it are advancing quickly beyond the pilot and proof of concept phase.
So What’s Holding It Back?
I often hear, “Blockchain is a solution looking for a problem.” It is, and that is fine! When you have a new capability, old issues might actually become irrelevant (as happened with telegraphs, fax machines, etc.). It takes innovators to realize this change and make a shift. Blockchain is about new business models and accelerating the digital transformation process.
Another comment I often see is, “Blockchain projects are failing.” It’s not that they are failing, it’s that they are, for the most part, not making progress quickly (i.e., not demonstrating significant returns) precisely because their approach is wrong.
My personal view is there are three things impeding faster adoption of enterprise blockchain. Overall, “old-school mentality” is the biggest factor holding back this transformational technology. The past is not the future, and we all need to be more open and adaptive to new technologies, which can transform lives.
Three Reasons Why Enterprise Blockchain Is Failing
1. Platforms are self-focused and often lack an ecosystem view. I find most platforms are often self-centered and focused on their own solutions, irrespective of other solutions out there. Some of the worst behavior is around this point, and it’s an area where all blockchain platforms need to improve.
2. Large consultancies are often old-fashioned in their views and tend to focus on how to make blockchain a revenue stream they can “own.” They often send sales teams who are less knowledgeable in blockchain and try to push one standardized blockchain solution. Unfortunately, the world has a little more color, and there are many different “mixes” of blockchain technology required to provide specific solutions for specific use cases.
3. Old-school business thinking means companies are often looking at “how to own” blockchain with intellectual property (IP), etc. Blockchain is an ecosystem play, and you cannot build standardized IP and roll it out on a regular basis. The fact that most blockchain platforms are open source (a general trend in tech now) enables better solutions to be built via the power of the total ecosystem. The focus should be on using these open-source platforms and tailoring each solution to the end customers’ use case.
Education, education and a little more education. The blockchain community needs to get behind the education side of this technology and discuss the use cases and the real benefits that are being seen with blockchain.
I believe that most people still do not understand this technology. Blockchain technology is a fundamentally different way to look at transactions and interactions in business, and you need an open and forward-looking attitude to embrace its potential. Blockchain will not fit in a regulatory box, it does not conform to the “I want to own the IP” world and it does not work well in a “my blockchain is bigger than yours” world.
I recommend educating yourself from real experts. Do not try to “fit” blockchain to your current process or structure — work with experts to develop a blockchain solution that adds value to your business.