What Challenges Does Blockchain Adoption Impose on Enterprise Developers?

Updated on: July 27th, 2020
This content has been Fact-Checked.
Blockchain Adoption Challenges Impose on Enterprise Developers?

As the threat landscape continues to grow increasingly, enterprises are looking to amalgamate ‘modern’ technologies such as AI, Machine Learning within their security infrastructures to help combat vulnerabilities more effectively.


Another technology that has significant advantages to offer through its implementation within organizations is the highly coveted blockchain technology. Ever since the advent of the ‘bitcoin hype‘ phenomenon, blockchain has ascended to the forefront of the digital landscape and has quickly become one of the most sought-after technologies today. Furthermore, the realization that many organizations had over the massive potential that blockchain had to offer was further made evident that by the end of 2019, ‘blockchain’ became the most significant buzzword in the marketing industry.


Although the initial hype that ensued the blockchain hype has quieted down a bit, the prospect of mass blockchain adoption is still considered by many specialists as the next ‘big thing’ to look forward to in the digital landscapes. Considering the popularity of blockchain (more specifically, the distributed ledger technology), however, it is safe to state that the digital world might be on the brink of widespread blockchain-adoption.


With that being said, although mass blockchain-adoption is sure to bring an onslaught of advantages to organizations as the VPN does, refer this link for more information. Organizations still need to take into consideration the fact that the technology is still relatively young. There is enough data about real-life implementation, and there’s also quite a steep learning curve that the organization needs to overcome. Moreover, even in the rare instance that a company’s researchers and strategists did their homework on the blockchain, there’s still a high possibility that you’ll encounter some challenges.


To aid our readers, we’ve compiled an article that offers excellent insight into some of the most common obstacles encountered while adopting blockchain within enterprises.


Transaction Processing Speed and Scalability

When it comes to widespread commercial adoption of blockchain, perhaps the most frequently encountered challenge is scalability. In a way, it might even be fair to refer to scalability issues as the Achilles heel of blockchain development within organizations. To further put the scalability challenge into perspective, let’s consider the following: Bitcoin supports a mere five transactions per second, whereas Visa allows for a staggering 2000 transactions within a second.

However, it is worth mentioning that while small and medium DLTs (distributed ledger technology) typically operate at fast speeds, it could still slow down the network, since hundreds and thousands of nodes are simultaneously processing high-volume transactions.


Today, scalability, combined with transaction processing speed (TPS), are significant bottlenecks standing in the path of blockchain’s mass commercial adoption. Fortunately, enterprises can take some steps to foster blockchain TPS and solve scalability issues, consisting of the following:


  1. Utilizing centralized blockchains: Despite the bad rep that centralized blockchains have garnered over recent years, with many referring to them as a glorified version of cloud computing, the tech can significantly aid in widespread blockchain adoption. Although centralized blockchains aren’t the most optimal for public projects, they provide a consistently desirable speed and try and tested solutions.


  1. Introducing ‘off-chain’ transactions: Also referred to as ‘second-layer’ solutions, off-chain transactions are fundamentally transactions that take place privately, that is, outside the base, or primary blockchain, and are hence not recorded there. By leveraging platforms and protocols on top of the initial blockchain, off-chain transactions can significantly amp up the transaction speeds. However, off-chain transactions do come with their fair share of risks, and in a way, break the fundamental principle of blockchain, which is to ensure that data is being kept intact.


  1. Clumping multiple low-level transactions into one: By batching many low-level transactions into one transaction, an example of which can be clumping several payments into one significant blockchain transaction, organizations can increase the transaction speed by allowing more individual transactions to take place per second. However, the cons of taking this approach are that it allows cybercriminals an entry point into the network and has recurring security limitations as well.


  1. Increasing the block size: Through forking, and increasing the block size, enterprises can get easy access to a higher TPS. With that being said, however, it doesn’t make quite a drastic change as one would expect, since increasing the block size is not possible.


Challenges Posed By Interoperability

Along with the obstacles provided by scalability and a lack of TPS, another potential weakness that could wreak havoc on mass blockchain adoption is interoperability, which includes contact points with external systems. The moment that a blockchain connects with a legacy database or any external source, all the security and privacy that it has to offer go to waste.


Since organizations have no control over third-party data, there is no virtually no way for companies to protect against the genuine threat of having a cybercriminal manipulate their blockchain system. Moreover, since it looks like we’re moving toward what looks like many interconnected private blockchain solutions in various sectors, the problem of missing standards and regulations will only become more daunting, which calls for immediate attention.


However, until there aren’t comprehensive interoperability standards enforced upon all involved parties, this challenge can not be decisively solved by developers only. Still, it is highly significant for blockchain developers, owners, and strategists to stay cautious of the issue and work to determine and identify any similar weak points.


Centralization or Decentralization- Which Is Better?

From its advent a couple of years ago, the most significant debate that blockchain has sparked is whether decentralization is better than a centralized ledger. Whichever side of the debate you may be on, however, one of the greatest strengths that the typical conventional public blockchain offers is its decentralization.


However, in an entrepreneurial setting, a blockchain-based supply chain monitoring and management solution would continuously need to absorb external data. They would be unable to extend its safety and quality-assuring protocols simply because of the lack of control over third-party data. Since we’re moving toward what looks like many interconnected private blockchain solutions in various sectors, the problem of missing standards and regulations will only become more pressing.


Blockchain Adoption Challenges – Conclusion

Hopefully, by the end of the article, users realize that despite how perfect the blockchain technology might appear from a distance, to ensure that companies make the most out of widespread blockchain adoption- they must realize the significance of accounting hindrances as well.


Nalia Khan
Blockchain / Web3 writer.

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