Is Blockchain Adoption the Future?
What you need to know:
Blockchain adoption is rapidly increasing among businesses
Speed, ease of use, and security the key driving factors
Blockchain is consistently one of the chief aims of tech implementation today
Blockchain is quickly finding itself as one of the most sought-after technologies to implement in 2021.
88% of respondents in a Deloitte survey indicated that blockchain will become mainstream, and 83% believe that if their organization doesn’t adopt it, they will lose a competitive advantage.
The market worldwide for blockchain tech is anticipated to rise from $1.2 billion in 2018 to nearly $40 billion in 2025, as more businesses continue to implement it.
Why are companies so keen to adopt blockchain, how does it help, and what’s in store for the future?
What Is Blockchain?
Without overcomplicating it, blockchain is at its core a means of storing data.
Typically, when information is stored, it is put into databases that are housed in servers.
This isolates information, making it prone to cyberattack or manipulation.
Blockchain differs from this with its system of storing information. Data is stored in groups of databases, or “blocks”, and after reaching storage capacity a new block is formed and chained to the previous, full one—hence “blockchain”.
Once data is stored in a block, it is given a “hash”, whereby information is verified and given a unique identifier code randomly generated by an algorithm.
For example, with a monetary transaction—the most common and popular use of blockchain—a transfer of money will be given a hash which verifies its expected value and associated data.
It is impossible to “unhash” a piece of data, so any information that has been tampered with will be immediately apparent because a new (incorrect hash) will be the result.
This is because each hash is reliant on generating the next dataset’s hash—referred to as the Merkle tree.
If one piece of information is tampered with, it has a knock-on effect on the hashes of every piece of data (and block) hence—a hacker would in effect have to change the identifying hash on every one of the incalculable number of transactions that exist in the blockchain.
What Does That Mean In Simple Terms?
It means that blockchain is a secure way of monitoring and tracking data entry and records. No one person has oversight of a blockchain, as information is hosted in a peer-to-peer system, preventing anyone the opportunity to tamper with it.
The bottom line is that blockchain tech is practically impregnable, and because of this, it is an extremely useful tool for financial transactions.
What About the Benefits for Business?
For enterprise and SMB organizations, blockchain presents a big opportunity and with it a number of benefits which are driving current trends of mainstream adoption.
All information that is stored in a blockchain is available to view on a public ledger.
For businesses, this means a level of transparency not previously possible and the removal of any third party or intermediary of any kind—meaning direct accountability for the company.
Likewise, not having a middleman for financial transactions makes things a lot easier.
Previously, verification of transactions would have to be undertaken by a third party of some kind, but blockchain does that on its own, meaning businesses and customers no longer have to worry about routing their money through another party.
Of course, the headline benefit is the superior security protocols of blockchain as a result of its design.
The way blockchain stores data is largely incorruptible and far safer from attack than traditional data storage on a server, making it a desirable option if financial security is a top priority.
By the end of 2020, it is estimated that 77% of financial sector incumbents will adopt blockchain as part of their systems or processes.
Changing Attitudes to Blockchain
Initial skepticism of blockchain is quickly being eroded as more businesses now look to use it.
Blockchain technology has had the unfortunate baggage of being associated with cryptocurrencies and bad faith actors like hackers using the tech to evade authorities.
But in truth that image does an enormous disservice to blockchain tech, which has proven time and again that it’s an extremely effective way of managing and documenting transactions.
As more companies adopt it, and more customers look to use it because of the protections it offers, this image and general attitudes towards blockchain have changed significantly.
Because of the benefits that blockchain can bring to a business, particularly as regards security and transparency, organizations are viewing its implementation as a key competitive differentiator.
In 2018, 43% of enterprise organizations viewed blockchain tech as a strategic priority—that figure has since risen to 55% and will continue to increase as adoption becomes more mainstream, though adoption among SMBs still lags behind.
Blockchain as a Service
As blockchain moves beyond its initial repertoire of managing cryptocurrencies to online transactions of all kinds, BaaS—subscription models for blockchain hosting capabilities and integration—has been on the up.
Microsoft and Amazon have already developed their own services for scalable blockchain for businesses, and many other options are also available.
Blockchain is finding success among the general public and businesses because of its unique benefits that other transaction services can’t match.
As far as security and transparency go, the technology provides what traditional data storage methods can’t, and as a result, businesses are adopting it in large numbers and consumers are warming to it.
For a long time, the hype around blockchain didn’t appear to be winning over skeptics, but as it becomes an ambition of almost every major financial institution, other organizations will (and are) follow.
We can expect blockchain to be a familiar component in transactions as adoption, implementation, and mainstream use continues to rise.
Subscribe to our blog to receive more insights into business technology and stay up to date with marketing, cybersecurity, and other tech news and trends (don’t worry, we won’t pester you).