By Manju Mohan, CEO and co-founder of Ionixx Technologies. Blockchain technology has the potential to change the way information is stor...
By Manju Mohan, CEO and co-founder of Ionixx Technologies.
Blockchain technology has the potential to change the way information is stored and shared across digital networks.
While national governments and international banks pour research money into blockchain projects, and practically the entire tech community sings the praises of the technology, it may seem like prominent immutable distributed ledgers already power our digital communication channels
But they don't. Not yet at least. In order to for the emancipatory effect of blockchain technology to manifest itself, a number of problems need to be acknowledged and dealt with first.
A technology that is constantly changing
There is no best blockchain platform out there. In fact, there are new blockchain platforms created every month and each with their own unique set of features. What we are seeing is a rapid iteration of the same underlying technology, which includes a cryptographic key, a distributed ledger with a shared transaction history, and a platform with an engagement protocol.Whether it’s a permissionless ledger with a proof of work protocol (bitcoin), a proof of stake protocol (as Ethereum aims to become), a private and permissioned blockchain for internal organization communication, or any other of the hundreds of blockchains in use today, the technology is diversifying and maturing at a rapid pace.
This is good for the technology, but means slower integration into popular use.
An absence of established players
Since the platforms keep evolving, it is hard to decipher which of them will become established players in the space. Much like the internet before the rise of Google, the blockchain industry lacks an established, recognizable application builder that offers industry-leading platforms for users.One of the challenges for builders looking to become an established player is improving user education. Without clear platform instructions and helpful educational resources, few platforms will rise to the top and few new users will join.
Poor product design
Developers like to think they have a platform solution to solve all the problems facing a user in a given industry. But assuming they know what their target audience wants and needs without validating this assumption is a flaw in design thinking.Developers should approach a blockchain platform like a startup. In the startup mindset, all assumptions must be tested in the real world through a build-measure-learn feedback loop.
It necessitates building a minimum viable product, testing how blockchain can be beneficial to users, and turning these insights into product features. It’s a rapid cycle of checks and balances that ensures the most optimal UX in an industry that is hampered by overly technical interfaces.
Lack of standards
The other major roadblock to growth in blockchain technology has to do with regulatory standards. Operating without national or international regulatory standards is normal in the emergent tech space, and in the case of blockchain, it will take a number of years to shift the legal framework of communication between entities from a centralized third party to an impartial decentralized system.Each new application of blockchain comes with its own set of regulatory questions because, as we know, this form of communication and data storage is new to everyone. That means scams and market manipulation are a definitive risk - for the time being.
Hot-topic areas of concern are liability and responsibility (on behalf of the builders and the organization leveraging the technology), compliance, transparency and reporting, taxonomy and reporting, and - of course - data security.
The financial industry is likely the first industry to see established regulatory standards, as established banks and fintech startups are finding success with blockchain-backed applications.
Rapid maturity, mass adoption?
Given these challenges, it’s clear that blockchain is not going to seamlessly integrate into communication channels overnight. However, that does not mean change is slow.A lot of the foundations for long-term use are being negotiated and established as we speak — but we won't be in this stage for long. Blockchain is much like the internet was 20 years ago, except in this case the changes are coming more rapidly!
Image via Istock.com
