In a previous post we discussed some important elements about the future of Blockchain. In particular, we analyzed some of its most game-changing uses and how they will impact the world at large.
At Koombea we are very confident that Blockchain will be one of the defining technologies of our age. However, we also acknowledge that there are still some challenges that need to be dealt with in order for the technology to be fully deployed.
In this post we analyze some of the most important elements that need to be considered and addressed in order for Blockchain to establish itself as a new technological standard. If these are solved, you can be sure to expect a whole new world in the short term.
Just like every new revolutionary technology, Blockchain requires some important changes to occur before it can be fully deployed. Some similarities show up when one compares its situation to that of the internet in its early days. Before the internet was accessible to large parts of the world’s population, a series of processes occurred that made it widely accessible. The rest is history. Something similar is occurring for Blockchain.
In terms of feasibility, there seem to be quite a few aspects that need to be addressed for Blockchain to go massive. Although most of them are technology-related, some involve societal changes.
Surprisingly, there is a lot of magical thinking when it comes to technology. There is a falsely held belief that just because something new hits the market, everyone will accept it because of its benefits.
The reality is often quite different. For innovations to be adopted, a set of conditions need to occur. In general, one of the most important requirements is that people trust what is being offered to them. Being useful is not enough. Companies and individuals need to believe that the solution being offered is reliable, otherwise, there seems to be no good reason to adopt it. This applies to Blockchain.
As it is still something relatively new in the eyes of many users, it needs to gain their trust. Failing to do so might delay its adoption, and even worse, vanish it to oblivion. There are still many questions that arise regarding Blockchain, like how will it be used, how does it work, what security and privacy issues it will bring, and so forth. In other words, there is still a lot to do in order to dismiss doubts and improve its perception.
This video shows a recent debate where some of the world’s most important experts on Blockchain debate about its uses, risks, and potential. As you might guess from the title, there is a lot of both skepticism and optimism surrounding it.
In recent years, the world has seen the rise of powerful technologies like never before in the history of computers. The problem with these technologies is that they are very demanding in terms of resource consumption. They require vast amounts of computer processing power, making it difficult to become easily accessible for everyone.
Technologies like Blockchain and Machine Learning require a considerable amount of computing power, meaning that a great number of super-powerful computers will become necessary. This sounds confusing given that we keep making better and more powerful computers. Nonetheless, the reality is that these new technologies surpass anything we currently have.
Before a full deployment of technologies like Blockchain becomes possible, this constraint needs to be addressed. Otherwise, Blockchain risks being a niche solution only for companies and individuals who can afford it.
A similar situation occurs in terms of energy consumption. Since Blockchain lies on a distributed ledger of information across a network of various computers and requires complex mathematical computations to maintain the chain, it is an energy-intensive technology. Just Bitcoin, one of its most popular applications, is estimated to consume about the same amount of energy as Switzerland. This is very problematic in terms of costs, but it can also be seen as a way to transition towards greener energy generation solutions.
As the world looks for sustainable energy solutions, technologies that are energy-intensive run the risk of being left aside. The best alternative for Blockchain is to solve this issue by going green. Another alternative is to make it more efficient and thus reduce its energy consumption.
In the future, this might lead to the outsourcing of Blockchain services. It is not crazy to expect to see these services provided by third parties with the appropriate computing and energy resources.
What came first, entrepreneurs or the conditions that gave birth to them? This is the chicken or the egg dilemma of our time. In order for innovations to be adopted, both the system and the entrepreneurs need to be aligned. Only when that occurs will the right conditions for innovation adoption be optimal.
Blockchain is no exception to this. In order to be adopted, countries need to make specific Blockchain policies that guarantee important elements like the right IT and energy infrastructure as well as the necessary human capital to manage it properly. Failing to create the right conditions will result in a poor Blockchain ecosystem.
Now, more than ever, it is necessary that companies and governments alike turn to experts on the subject and aim to find practical solutions. This is a topic that will start gaining momentum in the coming years.
Just as it is important for Blockchain to have the right ecosystem in place, it is also necessary to have the right regulatory framework. Many experts say that it should not be regulated because it goes against its principles of decentralized governance. Additionally, there’s a fear that any regulation might slow down future innovations. However true this is, it is also impossible to think that activities related to it can exist outside the law.
Regardless of whether one believes it should be regulated or not, past experiences of other technologies seem to point that it will eventually be regulated. As a result, we can expect to see governments regulating it, but the question remains as to how they will do it. It is important that private and public agents find a way to incentivize innovation and implementation without compromising its potential.
Wrapping It Up
Blockchain is sure to bring a major technological revolution. However, for this to occur there are a number of challenges that need to be addressed. Although some solutions are not at plain sight, the companies that start thinking in terms of how to implement them when they occur will have an advantage over their competitors.
If you are looking for a HiTech partner with years of experience managing new technologies, then contact us. At Koombea we have more than 12 years of experience building world-class products and delivering outstanding results.