Many businesses have joined the blockchain trend, but there are some aspects of the technology that make enterprises wary.
IBM, however, is more the exception than the rule when it comes to enterprises exploring blockchain solutions. Although the cryptospace includes many startups willing to risk their capital in the name of technological advancement and a better society for all, not every business cultivates that same mindset.
Existing enterprise-level processes may not be the best, but for the most part, they still work. Verbs like “disrupt” and “revolutionize,” then, may be white noise for business leaders who might think, “Why do we need blockchain when everything seems fine?”
ETHNews sat down with Marie Leaf, head of product at Kadena, to investigate just why some enterprises would say no to blockchain. Kadena is a blockchain company founded by Stuart Popejoy and Will Martino who met while working for J.P. Morgan’s Emergent Technologies group, where they researched blockchain’s role in FinTech. Martino has a history of working with the SEC, and Stuart has 15 years of experience working in the financial industry. Together, they started Kadena to build a blockchain that would be suitable for enterprise adoption.
Leaf told ETHNews that large companies may not see any value added by using blockchain. Even if some business executives believe the technology to be valuable, not all stakeholders or decision makers may agree.
“A roadblock is trying to boil the ocean, trying to get everyone on the same level [about blockchain] at the same time,” said Leaf.
Besides balancing communication across multiple parties, there exists another barrier at the technical level – the security of the code itself. Leaf said that enterprises generally want technology and solutions they can trust, which means a code that has been properly stress-tested. Trustworthy tech is especially important in the blockchain industry, as the technology is often used in situations where transacting parties cannot trust each other – instead they are trusting the technology.
This focus on trust also explains why many businesses choose to build upon existing solutions and applications. Leaf emphasized the importance of there being “a tech that works” for companies to rely on. In the nebulous and ever-changing cryptospace, however, there is no real “MVP” tech product that enterprises can look toward.
Leaf did mention proof-of-work as an established mechanism within the space – it “has been in production for 10 years” – but examples such as these are far and few between. For example, if we look at one of the most popular blockchains, Ethereum, it has only existed for a little over three years.
That said, these roadblocks may primarily affect larger enterprises. To Leaf, a lot of the potential of blockchain technology, especially regarding its social impact, actually comes from small- to medium-sized companies. She stated:
“The bottom line and fiduciary responsibility for large companies are still a real thing. To make business decisions, you have to have that economic use case in mind. The social good impact does come from large enterprises, but I think it’s going to be a lot more driven by the smaller enterprises, the small- to medium-sized businesses. It actually gives the small- and medium-sized enterprises a chance to coordinate their data management a lot more efficiently and potentially levels the playing field for … the value of data.”
Leaf also noted that the consortium model will be important for further enterprise-level adoption of blockchain. However, she believes a smaller scope, through what she calls a “pseudo-consortium,” is what makes these collaborative efforts effective.
In a conventional consortium, there may be 50-200 stakeholders who must agree on a decision. Oftentimes, the consortium devolves into a political game wherein individuals may make decisions based on personal biases, nepotism, or other factors not entirely professional in nature.
Because a pseudo-consortium is smaller, not only are there fewer decision makers but also less of a possibility for politics to affect the way business is conducted. Leaf said that with a pseudo-consortium, there may be “one leader” who “pave[s] the way and sign[s] on partner enterprises.”
At the end of the day, though, a blockchain solution may not be appropriate for all businesses. Leaf indicated that an important discussion Kadena has with some of its clients is why they, in fact, do not need to use blockchain technology.
Although mass adoption is an arguably universal goal across the cryptospace, blockchain for blockchain’s sake is not a compelling reason to explore the technology. Considering this, a lack of enterprise adoption may not be all that bad, especially when the use cases that do exist are meaningful and engage blockchain in a significant way.
Daniel Putney is a full-time writer for ETHNews. He received his bachelor’s degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.
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