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Learning the top 10 hurdles to blockchain adoption is a great way to improve your market overview. Blockchain technology is seen by many as one of the most influential inventions of the 21st century. These decentralized networks offer more efficiency, transparency, and security. As such, they continue to find integration across multiple industries. Here are the top 10 hurdles to blockchain adoption today.
1. New Tech Old Users
One of the most significant factors that has made blockchain adoption more difficult is the overall age of the average person using banking services. Unlike previous generations, the current demographic in the world is older than ever. Advancements in healthcare and other factors have increased life expectancy in most regions of the world.
While these developments are great, they have had an unexpected effect on the industry. People are living longer, which means they need their funds for longer. As such, there hasn’t been the massive transfer of wealth to younger generations that was seen in previous times.
This new market demographic means that the average age of a banker has increased. These older generations are less responsive to new technologies, such as blockchain networks. Additionally, since many of them have spent their entire lives building savings in the current system, they have no desire to convert to a new method of generating or storing value.
2. Energy Consumption
Energy consumption issues remain a top problem in the market. Conservationists have repeatedly pointed out that networks that leverage the Proof-of-Work consensus algorithm are power-hungry.
The reason for this consumption is that the PoW system requires users to exercise their computational power as part of the validation structure. To combat these issues, there has been a steady migration of mining farms to renewables.
For example, El Salvador recently built massive Bitcoin mining farms using volcanic energy. They are not alone in their desire to reduce crypto mining energy consumption and most new networks leverage other consensus methods to avoid these problems.
Scalability is at the top of every blockchain developer's mind nowadays. During the 2017 crypto rush, platforms such as Bitcoin and Ethereum faced massive congestion-related slowdowns. Congestion can cripple a blockchain.
When a blockchain is congested, the transactions take much longer and they can be far more expensive. For a network like Bitcoin to survive, scalability needs to be a major concern. Understanding this concern, developers have introduced scaling methods such as second-layer protocols and side chains.
4. Lack of Regulatory Framework
Another issue that has held back blockchain adoption is the lack of supportive legislation for these projects. When there is a lack of governmental support, financial institutions are wary of joining an industry. The main reason for the concern is that they fear later regulatory pushback.
Countries have begun to step up their blockchain legislative efforts. There are nations like El Salvador that have embraced blockchain technology and cryptocurrencies. The Latin American country raised eyebrows when it recognized Bitcoin as a legal tender.
5. Privacy Concerns
There are some in the market that find crypto privacy options to be a roadblock to adoption. They feel that privacy coins make it difficult for governments to get behind certain projects as they cannot be monitored or fail to meet some of the basic requirements set out by lawmakers.
Depending on the country you live in, privacy coins can be an issue. Notably, these scenarios are exactly why these projects exist in the first place. Privacy has, and will always be a core concept of certain crypto projects. However, there are plenty of fully transparent and open networks to appease lawmakers as well.
6. Security Issues
Every time a hack occurs in the market, it has negative effects on the adoption rate. The combination of new tech and users makes the market an ideal hunting spot for scammers seeking out people who are easily tricked or networks that have attack vectors.
7. Lack of Formal Educational Sources
Another issue that needs to be addressed for blockchain technology to take its throne is the lack of formal educational sources. The majority of people have no idea what a blockchain is and its capabilities. As such, there is no desire from the general public to integrate these networks into daily lives.
When you zoom out to nations where considerable effort has been put towards educating the masses about blockchain tech, you can see results quickly. Once again, a perfect example is El Salvador. The nation integrated an educational drive alongside its legalization, making Bitcoin tender, and now its citizens possess valuable knowledge that could one day help to make the country a valuable tech hub.
8. Fear, Uncertainty, and Doubt (FUD)
The mainstream media has had a field day bashing cryptocurrencies over the years. There are dozens of news reports that state that Bitcoin died even when the asset has outperformed others such as gold by massive margins.
FUD is one of the best tools the media has to control the population. They have repeatedly bashed cryptocurrencies in the past. A simple review of the price of these assets during the bashing versus today usually reveals that they were on the wrong end of the argument.
One of the biggest factors limiting crypto adoption is volatility. Merchants often find it very difficult to accept Bitcoin because of the token's volatility and congestion issues. When you have both of these problems, it makes the token unusable as a daily currency. Stablecoins attempt to solve this issue through the use of reserves to decouple from the market's activities. To date, these projects have seen some success.
10. Traditional Investors
There is a serious lack of traditional investors in the crypto market. Large hedge funds have just begun to get involved in the industry. These networks could boost adoption and make cryptocurrency a legitimate option amongst even the hardest central bankers.
The push for advanced crypto paper assets such as US ETFs could be crucial in changing this attitude. Massive firms such as BlackRock have already submitted ETF applications to the SEC, which has denied all to date. However, with pressure mounting, most analysts agree it's only a matter of time.
Blockchain Adoption is Inevitable
Blockchain technology brings too much to the table to deny. These systems can help to make life better and more profitable for everyone. As such, tackling the roadblocks to blockchain adoption should be a priority for everyone seeking a more transparent future.
Now That You Know the Hurdles to Blockchain Adoption, You are ready to Learn about the Top 10 Blockchain Research Tools