The idea of building an economy based on trust with the help of blockchain sounds exciting. However, it is also necessary to realize that there are barriers to the introduction of this technology. Among the key barriers are:
Without any understatement, I can say that the excitement around the blockchain and cryptocurrency is incredibly high. However, there are areas in which the use of blockchain is at least impractical. Like any system, it can not solve all world problems. Excessive expectations lead to a drop in confidence. This especially affects start-ups that try to set and achieve realistic goals, as well as produce adequate products on the market.
Possible loss of integrity
It is generally accepted that the blockchain system is completely stable and cannot be hacked. However, there is a large number of blockchains. Some of them are less resistant to burglary. Blockchain on the algorithm of Proof-of-Work (on which bitcoin, Ethereum are based) was created on the assumption that no organization can control at least 51% of the computing power of the network. Nevertheless, the computers are constantly evolving, which can lead to loss of integrity of the whole system. Since blockchain is proposed to be used for storing data of high importance (for example, real estate rights, state reporting, etc.), it should be stable throughout the entire time. Consequently, there is a need to develop mechanisms that would guarantee the safety of information for decades.
ICO as an extremely popular way to attract capital in the blockchain space. On the one hand, this is a plus, since in this way it is possible to bypass the obstacles that accompany the traditional process of fundraising. On the other hand, in the process of venture fundraising, a detailed analysis is carried out, which increases the likelihood of investment return. In addition, an overabundance of money often leads to a lack of financial discipline. Not all ICOs are scabbard projects, but they undermine the credibility of really potentially good start-ups.
Finding the right balance in regulation
With full confidence, I can say that excessive regulation hinders innovation. However, this does not mean that the blockchain does not need regulation at all. To move monetary assets, issue securities and other financial and legal transactions, projects use the established legal framework. Industry representatives should cooperate with regulators in order to stimulate the renewal of a long-standing legislative base.
In any digital space, the problem of cybersecurity remains. Since the blockchain is constantly developing, it is ahead of the speed of other industries. In such conditions, cyber-security experts lose their advantage over hackers.
- Resistance from state bodies and society
Worth remembering that the introduction of a system that will reduce corruption and make financial transactions more transparent is not beneficial to the authorities of corrupt state structures. Furthermore, blockchain will significantly reduce the percentage of the gray sector of the economy, which can cause discontent on the part of citizens who evade taxation or earn illegal. In addition, in any society, there is a stratum of people who are aggressively opposed to changing the habitual way of life, and the introduction of blockchain cardinally changes the space. Therefore, the wide distribution of this system will require overcoming a sufficient level of resistance from the public and states. For example, advertising space is regulated by giants of advertising platforms, such as Yandex, Mail.ru, Facebook, Google. The attempt to make the advertising space decentralized (a similar initiative offered by the Dan Service project), can meet resistance from their side, as in the future it will almost completely exclude intermediaries and thus reduce the level of earnings of these companies.
The future technology part is greatly idealized in the minds of the public. Blockchain really offers some kind of innovation, but it is worth taking any innovation through the prism of healthy pragmatism.