The 2017 challenge for Blockchain: Getting executives to understand it

The 2017 challenge for Blockchain: Getting executives to understand it

In the last few years, blockchain has been used in some ways, and a good number of firms have heavily invested in it, even though obstacles are still

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In the last few years, blockchain has been used in some ways, and a good number of firms have heavily invested in it, even though obstacles are still challenging its growth. The question now being asked is whether 2017 will be the year blockchain will prove to be the backbone of the business culture.

Deloitte carried out a survey of three hundred and eight executives online, at U.S firms having five hundred million U.S dollars or more in annual revenue, with the primary aim being to determine the corporate sentiment towards the technology of blockchain.Significant findings from the survey revealed that twenty-eight percent of the respondents had invested over five million U.S dollars in the technology, whereas ten percent had invested U.S million dollars or more in the blockchain.

On the other hand, thirty-nine percent of those interviewed had no clue regarding the technology.

It is critical to note that blockchain was developed together with the digital cryptocurrency Bitcoin. It functions like a giant ledger which is decentralized, recording each and every business transaction, and then keeping this kind of data on a global network so as to prevent any cases of it being tampered with.

David Schatsky, who is the managing director of the Deloitte LLP, agrees that indeed there is a certain degree of confusion in the business industry, regarding the full potential for blockchain. Perhaps this statement in based on the fact that more than twenty-five percent knowledgeable executives interviewed, say that their companies regard blockchain as a top-five critical priority. However, nearly a third view the technology as overrated.

Based on these findings, other sectors such as the media and telecommunications technology, manufacturing and consumer products are on the on the front foot in the deployment of the blockchain. Also, about thirty percent of interview respondents in these industries say that their respective companies have played a key role in propelling blockchain into production. On the contrary, only twelve percent of executives of financial service companies surveyed said that their business had deployed blockchain.

The other sector that is willing to embrace uses for blockchain is the electrical power industry. With blockchain, the industry can manage peer to peer networks; commercial transactions can also use it to enable energy users to register and trade credits that are renewable.

According to Westerhof Katrina, an analyst for market researchers, Lux Research, power becomes a logical use case due to certain reasons. First, energy and power units are an ideal fit for the so-called smart contracts based on the blockchain, and again, meters can transmit data into blockchain logic directly.

Secondly, bearing in mind that power depends on cumbersome clearing and trading systems so as to support markets that are complex in nature, blockchain might aid to create a smoother distributed system which can eliminate intermediaries as well as the associated costs.

But, in a report, under the topic, ‘Beyond Finance: The Impact of Blockchain on the Power Sector,’ Katrina Westerhof together with her colleagues highlighted some challenges ahead. These problems include:

• The small number of blockchain experts.

• The task of finding the right talent to build proprietary blockchain networks.

• Lastly, how blockchain will be treated in an energy sector which is currently tightly regulated.

This is a clear indication that blockchain will have to overcome serious stumbling blocks like these.

For example, individual companies are considering the prospect of incorporating blockchain into the sector of real estate; where it can be used in keeping the transaction records safer, alongside enabling faster and cheaper transactions.

Seventy percent of property investors still believe that regulators are not ready for the introduction of the blockchain, and this is according to research conducted by BrickVest, which is an investment platform for real estate. A significant number also feel that insurance firms, lending institutions plus the private equity firms would be unwilling to invest in the technology.

In a press release, Emmanuel Lumineau, the CEO at BrickVest, says that even though most of the property investors regard blockchain as an essential component of the future industry landscape, investors have highlighted correctly most of the anticipated challenges, mostly at the regulatory and legal levels.