New Paradigms for Enterprise Blockchain Adoption
Blockchain technology has created a new path to reconfigure the vision for the future of the internet. Data on the internet generated by individuals, organizations and other users is controlled by centralized entities, with a significant concentration of economic power and influence held by a few key corporate players who have thrived on the data aggregation economy. This phenomenon has alienated users and removed trust in what they see, find, use or assimilate.
Despite all these advances, the acceleration and use of blockchains in the real world and adoption by corporate or individual developers is still minimal. There are a myriad of complexities involved in the dApp development process, with many developers still steeped in traditional tools and models associated with Web2. Let’s examine a few limitations and issues in this space today.
Lack of integration(s)
The data that must be trusted lives in legacy databases today (eg Oracle, SAP, MS Dynamics, etc.) for businesses and Google Drive, One Drive, Box, Dropbox, etc., for individuals or consumers. There are limited tools that provide integration between these centralized data repositories or systems of record into a blockchain-ready solution, which presents an obstacle to proper decentralization.
Limited developer ecosystem
Blockchain is a new area, talent is in short supply and many developers are still going through the learning curve. Ecosystems have not yet encouraged the proliferation of blockchain resources on a large scale. Retraining developers from the traditional Web2 application era to decentralized applications creates a major barrier to adoption and slows execution speed.
Protocol management professionals
Typical older disciplines involve bodies of knowledge such as project management and product management. A formal discipline such as protocol management does not exist today, so many communities have adopted a blockchain protocol or two to rally efforts around. Protocol management as a discipline has weak formations.
These informal networks of professionals have lacked the structure, rigor and discipline to produce the seamless ability to deploy scalable dApps between multiple protocols. It is difficult for individual developers to gain mass support and access to multiple communities for their specific dApp initiative. This creates scale and speed barriers to adoption.
Cryptocurrencies on balance sheet
CFOs and corporate legal counsel remain wary of owning cryptocurrencies and taking on the volatility risk on their balance sheets. Blockchain companies must simplify or alleviate this problem by bridging fiat and crypto from the company’s balance sheet until regulations are clear and crypto as a market matures with reduced volatility. This barrier is difficult to eliminate for raw protocols, which require companies to take a leap of faith and be deemed unviable.
Management of operational risk
Many new protocols initially claimed to reject the Ethereum Virtual Machine (EVM) in the name of newer and more innovative technologies. However, as the needs of businesses evolved, they wanted stability, scalability and interoperability. This has led many protocols to invest in being EVM compatible (eg Solana, Algorand, etc.). Companies are also reluctant to deploy bridges given the security concerns surrounding them.
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Overcome obstacles
There are a number of options companies can adopt to overcome these obstacles:
Go low code, no code
Low-code and no-code options have penetrated the enterprise market at a very rapid rate. It has shortened development cycles and enabled resident developers to quickly deploy applications. Blockchain programming languages (e.g. solidity, rust, vyper, Haskell, etc.) are complex, non-enterprise based and talent scarce. This is why low-code and/or no-code blockchain platforms are a possible solution.
Consider the factors of EVM compatible blockchains
As mentioned earlier, EVM-compliant chains provide security, interoperability and scalability of assets and capital; but they also lower the cost of acquiring developers. It can also leverage Metcalfe’s Law and Reed’s Law, drive network effects and provide access to scale and liquidity.
The future is multichain
Most large enterprises have multiple cloud providers, and blockchain is likely to figure out the same way, mirroring classic enterprise behavior. This will also make assets portable across metaverses and games, while providing access to loans and collateral across multiple blockchains, thus potentially promoting wider adoption.
Pay in fiat
Until regulatory clarity is provided, and the market matures to a point where companies are comfortable paying gas fees, it may be best to insist on fiat payments to providers, platforms and protocols.
Develop integrations
It is unlikely that Web3 will rip and replace Web2 in enterprises. Running Web3 or blockchain projects in a silo is also not ideal. One needs to work with blockchains, integrate Web2 systems (eg CRM, ERP, identity, etc.), to optimize adoption and make Web2 and Web3 work seamlessly.
Carry out adequate due diligence
Ensure that the supplier of the product or protocol passes the scrutiny of commercial, operational, technical and human due diligence. Many (not all) businesses are reluctant to take risks from unlicensed actors such as miners and validators. Using blockchains with KYC verified validators is also an option.
Invest in ecosystems
Developer tools, decentralized platforms, creator kits, system integrators, use cases, etc., are the ecosystem that makes adoption easier. Businesses should look to these technology accelerators to help achieve the right fit and returns from public blockchains at scale.
Final thoughts
As blockchain becomes ready for enterprise adoption, companies and projects must adapt to the rhythm and movement of businesses. There are operational, commercial, technical and regulatory considerations that differ from the blockchain world. Blockchain companies and projects that only build for Web3 may not find their product market in the enterprise space. Web3 and Web2 must work together to drive exponential value. Meanwhile, Web3 must prepare for Web2 to embrace it.
Nitin Kumar is a growth manager and co-founder at zblocks. He is a recognized leader, author, former consulting partner and VC investor.
This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
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