Blockchain adoption is an investor’s huge point of view. Let’s talk about What are the barriers to blockchain adoption?
What are the barriers to blockchain adoption?
Business owner’s unwillingness
The support and commitment of top management are one of the key factors for the success of any strategic decision. While business owners are curious about how to use blockchain to achieve business success, they should be willing to experiment with new technology.
Unfamiliarity with technology
Blockchain is a complex technical concept that does not lend itself to being built on a fundamental level. Although blockchain was listed as a technology in 2008, only the success of bitcoin brought it to the limelight (Kamble, Gunasekaran, and Gawankar 2020). People are still trying to understand the core concepts of blockchain and researchers are exploring its applications in different fields.
Data privacy/security concerns
A key attribute that blockchain provides for supply chains is information transparency. Once the information is uploaded to the digital ledger, it cannot be removed from the chain and is available for the entire lifecycle of the blockchain. Cybersecurity breaches have made people and companies cautious about sharing personal information online (Engelenburg, Janssen, and Klievink 2019).
Blockchain has become the new governance technology that competes with other traditional institutions of capitalism and networks in that it can disrupt existing trust and attract criticism from institutions. management agency. Bitcoin associations suspected of money laundering have caused fear among policymakers and regulators. Furthermore, regulations vary from country to country and some governments choose to regulate technologies cautiously while others oppose technological change.
Blockchain is based on cryptographic and cryptographic techniques, providing a high level of security and a common platform for consensus in a distributed network. Therefore, for each transaction, complex algorithms must be run to check permission and consensus. This is only possible if massive computing power is established at each node of the network because low-powered systems cause large delays in transactions. However, given that supply chains are global, one can never expect all actors in the supply chain to be at the same level of technical proficiency.
Complexity in setup/use
Blockchain could theoretically provide technological answers, but it is not easy to convert traditional supply chain functions to digital platforms and software. Although blockchain requires the same infrastructure and high-speed Internet connection to set up the network, building a blockchain network depends on the existing software platform and developers. must decide which network to use.
Supply chain benefits must be weighed against the significant barriers to successful adoption). The uncertain benefits are therefore the real challenges for blockchain adoption in the supply chain.
Dependence on blockchain operators
As only a select few companies are capable of using blockchain systems, the dependency is higher, leading to cost trade-offs during initial setup and making maintenance difficult. Despite the advantages and hype surrounding blockchain, many companies fear being dependent on blockchain operators
Lack of cooperation among supply chain partners
Using blockchain solutions requires all supply chain partners to have the same level of technological maturity. All scanning, transmission, and data communication infrastructure needs to uniformly integrate existing systems with blockchain and will require cooperation between all partners. All stakeholders must adopt an integrated approach to provide a unified platform for blockchain. It is essential that all stakeholders involved in the network conduct a consensus review before blockchain adoption.
This paper shows you the 7 most significant barriers to blockchain adoption. I hope that it will help you with some ideas of your own.
And if you want to know more about barriers to blockchain adoption and how to face it, SmartOSC experts are always willing to help you. Contact us.
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