Enterprises are becoming more heavily focused on Blockchain for their strategic initiatives. A recent report found 75% of executive respondents are looking at how they can use Blockchain to their advantage. Only 1% reported Blockchain was not relevant to them.
However, despite the interest in Blockchain, majority of the enterprises are still unclear about Blockchain technology and 30% are struggling to get started. Hence taking a balanced approach will be critical to success.
Mainly two kinds of Blockchain networks are prominent today: Public and Private Blockchain networks
A public Blockchain is permission less. Anyone can access the network and participate, read and write the Blockchain. A public network is decentralized and does not have a single entity which controls the network. Data on a public network are safe as it is not possible to edit or alter data once they have been validated on the Blockchain network.
A Private Blockchain network, like a public Blockchain network, is a decentralized peer-to-peer network, with the significant difference that one organization governs the network. That organization controls who can participate in the network, execute a consensus protocol, and maintain the shared ledger.
What is driving the need for enterprise-wide adoption of Blockchain?
The fundamental benefits that Blockchain can provide to enterprises, that include decentralization of the entire business process, and the ability to proof transactions, and data security.
Many Factors are driving large scale adoption of Blockchain amongst enterprises, those value chain creation to clients via different use cases, and the growing need to simplify processes by creating transparency and reduce operational costs and transform the customer experience.
There are two additional factors that are contributing to the development of a wide range of use cases:
- Need for a multi-party infrastructure, i.e. an infrastructure involving various parties, such as vendors, clients, suppliers, etc.
- The need to build confidence among multiple parties because there are variations in processes, structures, data flows, frequencies, and communication modes that add to the complexities of business.
Blockchain as an innovative technology can also be useful for other things.
Blockchain for enterprises can mean, developing new technologies. It can serve a wide variety of other purposes as well. This include monitoring physical assets or voting rights, digital assets, ownership tracking, etc. For identifying the source of a document, an enterprise can even use it.
Blockchain technology has also been defined as an effective way to reduce costs, increase transaction speed, and establish trust between transacting parties.
How are enterprises currently utilizing Blockchain
A review of how some organizations around the industries are utilizing Blockchain to create new value propositions helps contextualize the potential of the technology, while many of the projects in this section still in the testing stage, they do offer some good insights into the types of business problems that Blockchain can potentially address.
7 Enterprise Blockchain Trends Driving 2020 Adoption
- Deployment — focus on fast time-to-value and resilience
- Simplifying privacy — the most elegant solution wins
- The ingredients of interoperability
- The emergence of Consortium 3.0
- New drivers for digital currency, digital assets, and payments
- National Platforms for KYC and KYS
- Supply chain transformation extends to new industries
Blockchain Implementation Decisions for Enterprises
while enterprises adopting Blockchain technology, that enterprise should answer few strategic questions.
- What levels of speed, scalability, security, and privacy do we need?
- Should we use private Blockchain's or public ones?
- Should we employ an enterprise-grade Blockchain platform?
- Should we join a consortium?
Most of the enterprises are implementing Blockchain solutions in private networks going rather than public access to the Blockchain network. Private networks solve some concerns around data and transaction privacy.
Key Challenges of using Blockchain Technology
The lack of knowledge and awareness to understand the Blockchain technology concept and how it works are the key challenges facing by enterprises while adopting Blockchain technology. The challenges associated which legacy infrastructure in any enterprise and lack of proper technical understanding are the major hurdles to the adoption of Blockchain in the mainstream. Blockchain is also requiring a cultural shift from the traditional ways to doing things, as it involves a major shift by Blockchain can also decentralizing the entire process and make sure that the required data privacy and security for the shared databases also adds to the major roadblocks in adopting Blockchain.
Challenges to be Solved before Large Enterprise Adoption
Currently, many enterprises are experimenting with Blockchain, but few have implemented a decentralized solution. However, only 33% have initiated a Blockchain deployment and many industries are accepting the Blockchain and gaining the traction and need to be fix before deploying in large enterprises.
Seven Blockchain challenges that need to be fixed;
- Scalability
- Transaction speed
- Decentralization
- Lack of Talent
- The Ecosystem
- Energy Consumption
- Resilience, irreversibility, quantum computing, and lack of standards
Why Aren’t More Enterprises Using the Blockchain? More needed
The Blockchain technology is supposed to be a revolutionary technology, changing the way of thinking about everything from financial transactions to cyber-security. Yet only something like 5% of the top 500 companies is using this technology as a core part of their business. We could see progress slowly and gradually, with consumers warming up to the idea of using this Blockchain, but there’s still something fundamentally stopping business from launching into more investments.
However, enterprise looking to leverage Blockchain might run into problems if they’re not aware of barriers which may arise at the implementation stage.
- Integration of applications: Adoption to the enterprise could require well-established processes and infrastructure. As people maturity also requires, in ways that don’t harm existing operations or risk changing consumer behavior too drastically.
- Interoperability challenges: Apart from centralization making Blockchain faster but less secure, there is another potential weak spot—contact points with external systems. The incorruptibility, security, privacy, of Blockchain end the moment it connects to a legacy database or otherwise gets new data from external sources.
- Security Concern: public chain is an enterprise setting, however, the directive is often not to decentralize the Blockchain but instead to keep it in-house: fully or partially centralized, under the control of a enterprise entity, often aimed at inner operations and thus open for selective edits and revisions.
The bottom line
Enterprises should rethink how current business processes work by using Blockchain technology. This opportunity is to prevent new business value by designing new more efficient models that deliver greater sopped, transparency, and lower costs in service delivery.
Adopting of Blockchain is being fueled by large organizations from tech companies. The technology is still maturing, and many organizations are at the proof-of-concept stage testing out potential applications of the technology. There are several challenges that need to be overcome before Blockchain solutions are widely utilized in Industry. The potential of technology to solve multiple business problems is promising.