When most people think about blockchain, they likely associate it with Bitcoin or other types of cryptocurrency.
But the blockchain technology introduced a decade ago to serve as a secure database for transactions in the cryptocurrency world has plenty of uses beyond that – and potential for even more. Around the world, blockchain can be or already has been used in such areas as energy, tourism and financial services.
Yet, plenty of people still have little knowledge of this technological breakthrough that could transform how they do business and live their lives. That raises a couple of questions: Is blockchain ready for the masses? And are the masses ready for blockchain?
“Despite renewed investor interest, blockchain technology still needs to evolve to overcome some challenges before adoption reaches people who are not early adopters or who are not very tech savvy,” says Kirill Bensonoff, a serial entrepreneur and an expert in blockchain.
Those challenges include:
Interaction with other systems
Blockchain’s growth depends on the technology’s ability to scale and interact with other systems and networks, Bensonoff says.
“Right now, blockchain as a service is limited in performance because of slowed transaction processing times and the inability to have various blockchain platforms interact with each other,” he adds.
Just one way this challenge is being addressed is by developers creating consensus mechanisms, Bensonoff says.
Consensus mechanisms refer to how participants in a blockchain network agree that the transactions recorded in the digital ledger are valid.
“This mechanism creates a trust and validity in the transaction between participants who aren’t familiar with each other,” he says.
Cost and usability
The cost of creating and implementing blockchain networks remains a significant barrier, Bensonoff says.
One possible solution could be the introduction of cloud-based blockchain technology from tech giants such as IBM, Microsoft and others.
“These companies have made cost reduction and scaling the crux of their business offerings,” he says. For blockchain to evolve, the average user experience also needs improvement, Bensonoff says.
“The good news is that developers and blockchain companies are catching on, and working to create a more welcoming look and feel for consumers,” he continuess.
If there’s a grey area in the blockchain world, regulation is it, although some states, such as Wyoming, and countries such as Malta, Estonia and Switzerland, are attempting to change that.
“In the meantime, this regulatory limbo is affecting adoption, with many waiting for some finality in legislation before they implement their own blockchain solution,” Bensonoff says. As some states pass blockchain bills, hopes are high that others will follow suit, he says.
Blockchain’s transparency is one of its strengths – and a weakness. Bensonoff points out that blockchain acts as a public ledger, which is necessary for the technology to provide trust and to verify transactions.
But that can make use of blockchain troublesome for some industries, such as healthcare, which needs to protect the privacy of much of its data.
Some solutions on the horizon, Bensonoff says, include making use of new developments like stealth addresses, ring-confidential transactions and state channels.
“Blockchain is definitely going to become more useful and more popular,” Bensonoff says. “But it must overcome these hurdles to get where it needs to be.”