New paradigms for enterprise blockchain adoption

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Blockchain tech­nol­o­gy has cre­at­ed a new avenue to recon­fig­ure the vision for the future of the inter­net. Data on the inter­net gen­er­at­ed by indi­vid­u­als, orga­ni­za­tions and oth­er users are con­trolled by cen­tral­ized enti­ties, with a sig­nif­i­cant con­cen­tra­tion of eco­nom­ic pow­er and influ­ence held by a few key cor­po­rate play­ers who have thrived on data aggre­ga­tion eco­nom­ics. This phe­nom­e­non has alien­at­ed users, remov­ing trust in what they see, find, use or assimilate.

How­ev­er, despite all these advance­ments, the accel­er­a­tion and use cas­es of blockchains in the real world and the adop­tion by enter­prise or indi­vid­ual devel­op­ers are still min­i­mal. There is a myr­i­ad of com­plex­i­ties involved in the dApp devel­op­ment process with many devel­op­ers still steeped in using tra­di­tion­al tools and mod­els asso­ci­at­ed with Web2. Let us exam­ine a few lim­i­ta­tions and prob­lems in this space today.

Lack of integration(s)

The data that needs to be trust­ed lives with­in lega­cy data­bas­es today (e.g., Ora­cle, SAP, MS Dynam­ics, etc.) for enter­pris­es and Google Dri­ve, One Dri­ve, Box, Drop­box, etc., for indi­vid­u­als or con­sumers. There are lim­it­ed tools pro­vid­ing inte­gra­tion between these cen­tral­ized data stor­ages or sys­tems of record into a blockchain-ready solu­tion, pos­ing an imped­i­ment to prop­er decentralization.

Limited developer ecosystem

Blockchain is a new area, tal­ent is scarce and many devel­op­ers are still going through their learn­ing curve. Ecosys­tems have not encour­aged the pro­lif­er­a­tion of blockchain resources at scale yet. Reskilling devel­op­ers from the tra­di­tion­al Web2 appli­ca­tions era to decen­tral­ized appli­ca­tions cre­ates a big bar­ri­er to adop­tion and slows down the speed of execution.

Protocol management professionals

Typ­i­cal lega­cy dis­ci­plines involve bod­ies of knowl­edge like project man­age­ment and prod­uct man­age­ment. A for­mal dis­ci­pline like pro­to­col man­age­ment does not exist today, so many com­mu­ni­ties have embraced a blockchain pro­to­col or two to ral­ly their 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 gar­ner mass sup­port and access to mul­ti­ple com­mu­ni­ties for their spe­cif­ic dApp ini­tia­tive. This cre­ates scale and speed bar­ri­ers to adoption.

Cryptocurrencies on balance sheets

Chief finan­cial offi­cers and the legal coun­sel of enter­pris­es are still wary of own­ing cryp­tocur­ren­cies and assum­ing the volatil­i­ty risk on their bal­ance sheets. Blockchain com­pa­nies need to sim­pli­fy or alle­vi­ate this issue by bridg­ing fiat to cryp­to off 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 enter­pris­es to take a leap of faith and are con­sid­ered unviable.

Managing operational risk

Many new pro­to­cols first claimed to dis­miss Ethereum Vir­tu­al Machine (EVM) in the name of new­er and more inno­v­a­tive tech­nolo­gies. How­ev­er, as the needs of enter­pris­es unfold­ed, they want­ed sta­bil­i­ty, scal­a­bil­i­ty and inter­op­er­abil­i­ty. This has caused many pro­to­cols to invest in being EVM com­pat­i­bil­i­ty (e.g., Solana, Algo­rand, etc.). Enter­pris­es are also reluc­tant to deploy bridges giv­en the secu­ri­ty issues around them.

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Overcoming obstacles

There is a myr­i­ad of options enter­pris­es 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 cit­i­zen devel­op­ers to rapid­ly deploy appli­ca­tions. Pro­gram­ming lan­guages around blockchain (e.g., solid­i­ty, rust, vyper, Haskell, etc.) are com­plex, not enter­prise native 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-com­pat­i­ble chains pro­vide secu­ri­ty, inter­op­er­abil­i­ty and scal­a­bil­i­ty of assets and cap­i­tal; how­ev­er,  they also low­er the cost of acquir­ing devel­op­ers. It can also har­ness Metcalfe’s law and Reed’s law, dri­ving net­work effects and pro­vid­ing access to scale and liquidity.

The future is multichain

Most large enter­pris­es have mul­ti­ple cloud providers and blockchain is like­ly to pan out sim­i­lar­ly, mir­ror­ing clas­sic enter­prise behav­ior. This will also make assets portable across meta­vers­es and games, while allow­ing access to loans and col­lat­er­al across mul­ti­ple blockchains, thus poten­tial­ly pro­mot­ing broad­er adoption. 

Pay in fiat

Until reg­u­la­to­ry clar­i­ty is giv­en, and the mar­ket matures to a point where enter­pris­es 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. Oper­at­ing Web3 or blockchain projects in a silo is also not ide­al. One must work with blockchains, inte­grat­ing Web2 sys­tems (e.g., CRM, ERP, iden­ti­ty, etc.), to opti­mize adop­tion and make Web2 and Web3 oper­ate seamlessly.

Conduct adequate due diligence

Ensure the prod­uct or pro­to­col ven­dor pass­es the scruti­ny of com­mer­cial, oper­a­tional, tech­ni­cal and human cap­i­tal due dili­gence. Many (not all) enter­pris­es are reluc­tant to assume risk 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 mak­ing adop­tion eas­i­er. Enter­pris­es should look out for these tech­nol­o­gy accel­er­a­tors to help achieve prop­er fit and ROI from pub­lic blockchains at scale.

Concluding thoughts

As blockchain gets ready for enter­prise adop­tion, com­pa­nies and projects must adapt to the rhythm and motion of enter­pris­es. There are oper­a­tional, com­mer­cial, tech­ni­cal and reg­u­la­to­ry con­sid­er­a­tions that are dif­fer­ent from the blockchain-only world. Blockchain com­pa­nies and projects build­ing only for Web3 may not find their prod­uct-mar­ket fit in the enter­prise realm. Web3 and Web2 must work togeth­er to dri­ve expo­nen­tial val­ue. Mean­while, Web3 must get ready for Web2 to embrace it.

Nitin Kumar is a growth CEO and co-founder at zblocks. He is a rec­og­nized leader, author, for­mer con­sult­ing part­ner and VC investor.

This arti­cle was pub­lished through Coin­tele­graph Inno­va­tion Cir­cle, a vet­ted orga­ni­za­tion of senior 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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