The blockchain has arrived
Once relegated solely to cryptocurrency, blockchain technology has moved into businesses of all sizes in a major way. A recent study from PwC – Blockchain is here. What’s your next move? – sheds light on the state of enterprise adoption and also highlights difficulties for wider blockchain use, including potential regulatory problems and issues of trust.
Among the 600 executives surveyed by PwC, 25 percent claim to have fully live blockchains implementations or pilot programs already underway. Furthermore, 32 percent of executives say their companies have blockchain implementations in active development, while 20 percent are in a research phase for determining how to best use blockchain technology. In total, only 14 percent of surveyed executives stated that there was no interest in blockchain technology at their companies. These high figures exist among widespread uncertainty, showing just how much companies are motivated to utilize blockchain technology for a least a portion of their business even though the future is a bit murky.
Despite widespread interest in using blockchain technology, executives see potential hurdles. Forty-eight percent listed regulatory uncertainty among the top three barriers to blockchain adoption, and 27 percent rating it as the most pressing issue. A lack of trust among users was rated a close second, with 45 percent of respondents placing it in the top three and 25 percent ranking it as the top issue. Technical considerations followed; 44 percent of respondents were concerned about their ability to bring their network together, and 41 percent were concerned about separate blockchains not working together. Rounding out the top seven concerns were questions about blockchain’s ability to scale, intellectual property concerns, and audit or compliance concerns.
Regulatory uncertainty will likely be a key concern for the foreseeable future. The decentralized nature of blockchain implementations is at odds with traditional business practices and traditional regulations, and regulatory structures are notoriously rigid and hard to adjust to digital transformation in general, with blockchain technology, in particular, being especially difficult. Those drafting laws pertaining to business typically have relatively scant tech knowledge, and tech innovators often fail to appreciate just how complex and important precisely defined regulations are. Issues of trust may resolve more quickly; once users find out that a service or platform they use relies on blockchain technology, they may find using blockchain-based technology to be trustworthy. The blockchain concept is somewhat difficult to understand at first, and it’s natural for people to be a bit skeptical when first introduced to it.
Forty-six percent of respondents believe finance services will be the leader for blockchain technology over the next three to five years, followed by energy and utilities at 14 percent, healthcare also at 14 percent, and industrial manufacturing at 12 percent. At the moment, tech leaders believe the United States is leading the way for blockchain technology, with 29 percent believing it’s the leader, while China came in second at 18 percent. Executives expect this to change, however; within three to five years, those surveyed believe the results will be almost exactly reversed, with 18 percent believing the United States will lead compared to 30 percent who believe China will take charge.