By David Drake
A report by Forrester Research paints a gloomy picture for blockchain, saying that up to 90% of active blockchain initiatives in the US will end up being abandoned, and will “never become part of a company’s operations.” The market research firm further predicts that the majority of blockchain-based projects in the US will be put on hold this year, while at least 90% of these will not form part of operations in companies that initiated them.
In addition, the research firm says companies that have been striving to incorporate the distributed ledger technology in their businesses are now scaling down on their ambitions and pulling back.
These statistics show that many issues need to be considered by businesses before deciding to integrate blockchain into their processes. Among these are connectivity to a partner ecosystem, enterprise integration with internal systems, compliance and regulatory requirements, interoperability requirements, and real time monitoring of blockchain-based transactions. In this article, I will highlight only 3 of these issues.
1. Business Match
Increasingly, we are seeing viable innovations being developed on blockchain to solve problems that people experience on a day-to-day basis. In the business space, there are several interesting projects, such as Gath3r which facilitates optimization web mining; interactive advertising platform, NoizChain, the crypto coupon advertising marketplace, Qupon, and cryptocurrency trading marketplace, BQT.
The social aspect has not been left behind. Innovations, such as social network platform, ONe Network, online customer satisfaction platform, IOU, and family smart contracts platform, URAllowance, are available. But the fact that blockchain is an innovative technology does not mean that every business can use it.
According to Reginald Ringgold, CEO at BlockVest, there are many business models where blockchain technology does not make sense. He says, “A pizza parlor might find a hard time selling how integrating Blockchain will improve their business operations.”
On the other hand, Aljaž Pogorelčnik, media consultant at BehaviourExchange, holds that that many business models vitally depend on the blockchain technology.
He notes, “BehaviourExchange is a good example because the platform simply does not work without using blockchain for its user profiles. If distributed ledger technology is an integral part of your business, scaling down or abandoning it is not an option.”
Ringgold further highlights a key factor in integrating blockchain to a business advising that the next question should be probably the most important.
He asks, “What are the risks to reward those involved in integrating Blockchain? How much will it cost to make your current systems interoperable with current Blockchain Technology. Then, what will the business gain as a result of Blockchain Integration.”
These questions must be answered thoroughly, and if there are kinks then these must be ironed out first before you, the company owner, and the investors decide to plunge into the world of blockchain.
3. Experience with Blockchain
According to Bryan Stone, CEO at HFC Coin, blockchain does not guarantee success in a business. He says, “Blockchain is not a magic wand that instantly creates value or success. Integrating blockchain is not enough to successfully run a business.”
Stone further poses the question of utilization of the technology in a business and advises management to understand the technology first before deciding to adopt it.
“Does the company and management harnessing the blockchain technology understand the business they plan to operate in? Management still needs to understand its clients and the market they operate within. Integrating blockchain technology to a company with little experience will result in poor results for investors and the company,” he adds.
The success of a business that is tapping into blockchain and distributed ledger technology is hard work – to integrate both – and enable the business to soar to new heights. The adjustments should not be so much that it would be costly. Security features of the business, and real-time monitoring should be enhanced, all for the betterment of the business.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.