Blockchain technology hasn't reached its full potential in the business world.

Although mainstream technology communities are rife with theoretical applications of blockchain, actual applications to drive business value with blockchain have rarely ventured beyond the proof-of-concept stage.

Considering the hype that surrounded blockchain in the early years of its emergence, it is surprising how the technology has not yet achieved mass adoption. While the potential for driving business value with blockchain remains as promising as ever, businesses have been cautious in the implementation of the technology in their processes. This caution is justified, as overlooking the hype and managing expectations are key first steps toward successful blockchain adoption. Although blockchain assures high returns in the long run, understanding its potential, the challenges associated with its implementation, and identifying the right steps towards overcoming those challenges are vital in achieving them.

Unlocking the Potential of Blockchain in the Business World

Source: Dr Mark van Rijmenam

Experts are predicting massive delivery of value with blockchain, albeit some time away in the future. A Gartner report projected the business value added by blockchain globally to exceed $3.1 trillion by 2030. Blockchain can not only be used to improve financial transactions as is being done now, but can also be used in broader applications like recording supply chain activity, maintaining inventory, and executing insurance agreements. Blockchain’s ability to solve business problems is being proven time and time again through numerous proof-of-concepts and pilot projects that have been executed across the world. However, these applications only use blockchain as an enabling technology, i.e., as a means to make existing businesses. However, driving real business value with blockchain requires business and technology leaders to adopt design thinking and use blockchain as the foundational technology for innovative business models. However, achieving disruption using blockchain will only come after eliminating a few associated risks and challenges.

Why is It Challengig for Blockchain To Deliver Business Value?

Source: Norton

The biggest challenge surrounding blockchain adoption is the disproportionate combination of its hype and general understanding. While there is no need to re-emphasize the excessive hype surrounding blockchain, the lack of its understanding among the public, and even among some business leaders is noteworthy. This lack of understanding leads to undue expectations and exuberance which results in hastily planned and executed blockchain applications, which fail to deliver as expected.

Another challenge that is impeding mainstream blockchain adoption and generation of business value is the immaturity of the technology. This means the technology is still evolving and is bound to undergo a series of changes before becoming stable and usable.

Blockchain scalability is a major roadblock in the sustainable adoption of blockchain. Ecosystems and platforms based on expansive blockchain networks cannot be created and operated sustainably due to the high amount of energy consumed by the network for every transaction. Researchers are still identifying ways to overcome the scalability issue of blockchain, which may lead to the resolution of this issue soon.

How Blockchain Can Deliver Business Value

The associated risks and challenges to creating business value with blockchain should not deter businesses from foraying into the adoption of this technology. Business and technology leaders should start planning pilot projects in low-risk-high-return areas as their initial step towards blockchain incorporation. They should expect and prepare for continuing change in the technology, which is imminent, while planning a blockchain roadmap. Businesses should do their best to avoid being caught up in the blockchain hype-train, and rationally decide the application areas for blockchain. They should avoid the trap of implementing blockchain for the sake of it, without having any business objective or problem in mind.

Conclusion 

Organizations seeking to drive business value with blockchain must adopt blockchain in well-planned, incremental steps across their operations, while simultaneously continuing with exploratory, innovative projects. Staying out of the blockchain race may prove to be as costly a mistake in the long run as failed implementation. Thus, businesses must find the balance between cautious inaction and exuberant action pertaining to blockchain adoption to maximize the benefits that the technology has to offer.