Blockchain technology could disrupt the financial sector. Its immutable, digital, and publicly available decentralized network challenges the centralized and opaque legacy bank networks. Governments across the world, along with private organizations around the world, are showing interest in working with blockchain technology. However, widespread adoption still doesn’t look like a possibility. Now Deloitte is pointing out the five primary keys to blockchain adoption that the industry must pay attention to.
The Three Basics of Performance, Cost, and Interoperability
First, blockchain technology needs to improve its performance, especially when it comes to speed. In a study by Deloitte, it says that “Blockchain can be slow.” While legacy transaction systems can process thousands of transactions per second, the Bitcoin network handles only seven transactions per second and Ethereum only 15.
The study claims:
“Because of its relatively poor performance, many observers do not consider blockchain technology to be viable for large-scale applications.”
Better consensus mechanisms can solve this problem.
The second is interoperability. Blockchains are still running within their own ecosystems, and interoperability must be achieved to mingle different networks together. There is yet no standard that could make this happen. The creation of a standard will help provide more freedom to developers in the industry.
GitHub, for instance, currently has 6,500 active blockchain projects with different coding languages and protocols. Letting them all come together and operate on each other’s networks will be a breakthrough.
Third, blockchains should also be able to reduce cost and complexity for users. Miners are already paying huge electricity costs, which means that blockchain and cryptos don’t come cheap. The cost of creating and maintaining blockchain systems is still high. This could be handled by cloud solutions. The research says:
“New cloud offerings have been coming to market at an accelerating pace and have the potential to lower the barriers to developing and operating blockchain networks.”
Regulation and Community Collaboration
Fourth, blockchain must also depend on better community collaboration in order to heighten adoption. More firms should come together and collaborate on blockchain development. The study suggests that not all blockchain consortia are developing applications and not all of them are as effective as well. Therefore, there is a need for more active and perpetual blockchain-based collaborations that could further develop the ecosystem.
The fifth is creating supportive regulation for blockchain innovation. Regulators are not comfortable with the speculative nature of cryptocurrencies, and this could mean stringent regulations on blockchain too. Some US states have passed blockchain regulations, and some others are considering such laws. The patchy framework or state laws can make way for federal regulations as well.