Blockchain technology is a database mechanism that allows transparent information sharing within a business network, allowing enterprises to streamline business processes at scale.
As per a recent report by Research and Markets, “Blockchain Technology – Global Market Trajectory & Analytics,” the global Blockchain market is projected to reach US$30.7 Billion by 2027 at a CAGR of 43%.
Despite the number of business efficiencies that Blockchain impacts, there are challenges associated with the technology, that are limiting its widespread adoption. Here are a few challenges Blockchain technology enterprises need to overcome.
Blockchain adoption provides long-term benefits like productivity, efficiency, timeliness, and reduced costs however, it is costly to put it in place initially. Enterprises need to acquire, purchase and develop the required software to run Blockchain technology.
At the same time, enterprises require specialized hardware to use the software. In addition to the software costs, finding qualified personnel to work with the technology is also necessary. The Blockchain technology space is growing at a rapid rate, while the professionals proficient in the field are few and far between.
Therefore, due to the great demand and limited supply, organizations need to pay high salaries who are qualified for these positions. As a result, it becomes difficult for small and medium-sized businesses to move to a complete or even partial Blockchain-based system.
An organization needs to find a way to integrate its existing system with the Blockchain solution to move to a Blockchain-based system. Blockchain solutions must handle all functions needed by organizations, initially making it difficult to eradicate legacy systems.
Therefore, significant changes must be made to the existing approaches to facilitate a smooth transition. It may be unviable to integrate the legacy systems with Blockchain solutions.
Hence organizations need to acquire compatible new systems to run the Blockchain solution. This needs meticulous planning, time, and money to achieve successful company-wide implementation, hence making companies reluctant to move to Blockchain solutions.
Blockchain is designed to be transparent. Enterprises must protect and restrict data access to ensure safety and privacy. Hence, Blockchain technology can be established in spaces with sensitive data once this challenge is mitigated. A Blockchain can meet the needs and specifications of the task at hand, authorizing access to parts of the Blockchain relevant to the functions.
Establishing a customized Blockchain needs a sizable amount of planning and expertise to minimize enterprises’ apprehension about the technology making the adoption more likely.
Also Read: How CIOs can Ensure Data Access Control and Visibility Across Clouds
Blockchain technology mechanisms utilize complex mathematical problems to secure the network. These calculations require vast energy to power the systems that solve the problems. Simultaneously, significant energy is used to run the computers, while a sizable amount of energy is required to stabilize the systems.
It is a deterrent to many corporations that a vast amount of energy is needed to keep the most well-known Blockchain in operation. With climate changes, massive use of energy seems like it could be more justifiable. With climate change being a significant concern, such massive energy use does not seem justifiable.
Therefore, enterprises need to move the Blockchain network to a proof-of-stake mechanism that requires much less energy to function. This strategy will make Blockchain technology more sensible concerning energy consumption.
With the growing demand in the market in the coming years, Blockchain can be a powerful solution once adopted with increasing calls for visibility and transparency across and between organizations.
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Apoorva Kasam is a Global News Correspondent with OnDot Media. She has done her master's in Bioinformatics and has 18 months of experience in clinical and preclinical data management. She is a content-writing enthusiast, and this is her first stint writing articles on business technology. She specializes in Blockchain, data governance, and supply chain management. Her ideal and digestible writing style displays the current trends, efficiencies, challenges, and relevant mitigation strategies businesses can look forward to. She is looking forward to exploring more technology insights in-depth.
