For the benefits of blockchain to become a reality, there must be real communication between the blockchain industry and business owners to achieve shared goals.
Blockchain technology is having a profound effect on the business landscape. While small- and medium-sized enterprises (SMEs) have traditionally relied upon established companies for capital and resources, blockchain is creating an environment of self sufficiency, enabling start-ups to scale and aggregate resources independently. However, for the benefits of blockchain in business to be truly felt, there are a number of obstacles which must be overcome—primarily, blockchain’s scalability issues; the cost of blockchain adoption; and a general lack of knowledge and understanding in business circles of blockchain’s true potential.
The Impact “Blockchain for Business” will have on Start-up Operations and Culture
In an age defined by Internet connectivity and convenience, the challenges faced by SMEs have remained largely the same. While the manner in which companies and customers interact has evolved over time (e.g. the creation of online marketplaces, Internet banking, and wireless payments), the path to success for start-ups is largely unchanged.
Start-ups have remained dependent upon established companies to effectively grow and succeed, often requiring the provision of resources and capital by larger industry actors. Start-ups and SMEs face the same recurring struggle in terms of industry connection and reputation-building. This means it can often take months, or even years, for a business to flourish, and for consumers to recognise and trust a brand.
Blockchain technology can mitigate these barriers to success, levelling the playing field for those looking to break into business markets, and enabling smaller enterprises to innovate and exist independently. As reputation becomes redundant on the blockchain by creating a transparent, trustless environment, emerging companies are less likely to have to compete with the reputational legacies of larger corporations in the same industry.
Another benefit which blockchain presents to businesses is that as a result of its decentralised nature, blockchain enables any company to have global reach from the outset, without the need to build expensive, centralised headquarters and offices. This means that teams can be distributed across the globe, and that hiring may be based on capability and interest, and less on geography. This allows businesses to quickly onboard the best talent and operate in fully decentralised employment markets.
Barriers to Blockchain in Business
Despite the many potential benefits presented by blockchain to businesses, the rate of corporate adoption has been limited. If blockchain is to enter into the mainstream and bring a litany of benefits to start-ups and businesses worldwide, a number of barriers to adoption must be overcome.
The primary obstacle to blockchain’s mass adoption is its scalability problem. In its current state, blockchain can be likened to that of a highway, which experiences gridlock when traffic reaches a certain point. This results in slower transaction times and network congestion. The capacity for blockchain to handle high volumes of traffic without slowing down is necessary if it is to rival more traditional digital networks. The most effective way of decreasing network congestion caused by increased traffic is to introduce sidechains as a means of segregating each use case. Similar to adding lanes to a highway for different types of vehicles, with one lane for sedans, one for trucks, one for bikes, and so forth—sidechains streamline traffic and decrease the likelihood of a gridlock. As more use cases get added, more lanes are added. This ensures that congestion does not permeate between them.
Outside of the current technological limitations of blockchain technology, businesses face other logistical barriers to its adoption, including cost. Although blockchain has the potential to significantly reduce the cost and time involved in running a business, it can be expensive to build a blockchain from scratch. Many blockchain investment firms and incubators are working to help traditional businesses overcome the cost barrier of initial blockchain adoption.
Finally, blockchain adoption in business has been limited to date as a result of a lack of understanding of its potential. There is still a disconnect between business owners and the international blockchain community. Educational initiatives and cross-sectorial dialogues will be necessary to overcome these knowledge barriers. For blockchain to present business owners and SMEs with tangible benefits, there needs to be consistent dialogue between the blockchain and business sectors on each other’s requirements, pain points, and strengths.
Project-led initiatives are seeking to bridge this know-ledge gap and to facilitate mutual understanding between business owners and the blockchain community. Industry bodies, such as the aelf Innovation Alliance, a consortium of some of the most prominent blockchain for enterprise advocates, are producing educational resources to promote peer-to-peer learning and industry advancement. The aelf Innovation Alliance also endeavours to engage with businesses and decision-makers to better understand how blockchain can be best applied to enterprise, and this includes meeting with corporate actors and executives, as well as conducting research to better understand the rate of blockchain adoption in business.
The Future of Blockchain-integrated Businesses
Looking ahead, as blockchain becomes more mainstream, and there is greater adoption of blockchain in enterprise, the business landscape will evolve along with it. Blockchain will eventually eliminate many of the hurdles which stand between SMEs and long-term success.
As blockchain decentralises information, services, and company teams, knowledge-sharing will become more transparent and reputable, leading to higher levels of innovation and corporate collaboration. This will have a profound effect on the potential for companies and communities to work together, leveraging one another’s strengths and offering stronger products and services to end-users and customers.
As established companies become less influential on the success of nascent corporations, the economy will see increased competition between larger organisations and small, dynamic firms entering the marketplace. This will result in a substantially improved experience for consumers as there will be more marketplace competition, leading to higher quality products and performance by businesses.
Blockchain has the power to heavily and positively impact the international business sector for many years to come. For these benefits to become a reality however, there must be real communication between the blockchain industry and business owners, and it is up to both communities to initiate and facilitate a vibrant, open dialogue, and promote a willingness to work together to achieve some large, but doable goals.
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