Major audit and consulting firm Deloitte has identified five areas that require further development in order for blockchain technology to reach mass adoption.
According to a study, published on Friday, the nascent technology “continues to inspire widespread enthusiasm”, with business leaders from different industries acknowledging its potential to “streamline business processes, enable new business models, and potentially reshape industries”. However, the technology is still facing some obstacles that limit its commercial adoption. Deloitte said that “progress along five vectors can help mitigate or topple existing barriers to adoption”, bringing blockchain closer to the mainstream.
According to the study, these five vectors of progress are as follows: increasing transaction speeds and performance; enhancing standards and interoperability; reducing complexity and cost; regulatory support and expansion of consortia. The first three of these vectors would help enhance the technical feasibility of blockchain while the other two help broaden the technology’s applicability to a greater number of use cases and industries.
Exploring these five vectors in more detail, the study notes that the industry has been working on making improvements each area. With regards to increasing transaction speeds and performance, the study highlights initiatives such as Ethereum’s shift to Proof-of-Stake and the ongoing development of sharding, as examples of developers working on improving the typical blockchain protocol. Similarly, a number of vendors, including tech giants such as Amazon, Microsoft and IBM, now provide cloud-based blockchain technology as a service, which has the potential to reduce the complexity and lower the barrier to entry for businesses interested in developing and operating a blockchain.
At the moment, regulatory issues appear to be one of the main barriers to mainstream adoption, but the study notes that we’re already starting to see regulators stepping up their efforts to address the unique challenges presented by the new technology. “This year alone, some 17 US state legislatures have considered and passed dozens of bills pertaining to the adoption of blockchain technology,” Deloitte notes. “These bills cover areas such as the recognition of cryptographic signatures, the definition and use of smart contracts, and the use of blockchains for maintaining business records.” Still, the company cautions that a lot needs to be done before the major regulatory hurdles, though momentum is building.