Blockchain technology has created a new path to reconfigure the vision of 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 business players who have thrived on the economy of data aggregation. 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 adoption by companies or individual developers are still minimal. There are a myriad of complexities involved in the dApp development process with many developers still steeped in traditional tools and patterns associated with Web2. Let’s look at some limitations and issues in this space today.
Lack of integration(s)
Data to be trusted today resides in legacy databases (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 that allow integration between these centralized data stores or systems of record in a blockchain-ready solution, which is a barrier to proper decentralization.
Limited developer ecosystem
Blockchain is a new field, talent is scarce, and many developers are still in the learning phase. Ecosystems have not yet encouraged the proliferation of large-scale blockchain resources. The transition of developers from the era of traditional Web2 applications to decentralized applications creates a major obstacle to adoption and slows down the speed of execution.
Protocol Management Professionals
Typical legacy disciplines involve knowledge sets like project management and product management. A formal discipline such as protocol management does not exist today, so many communities have adopted one or two blockchain protocols to rally their efforts. Protocol management as a discipline has weak formations.
These informal networks of professionals lack the structure, rigor, and discipline to produce the seamless ability to deploy scalable dApps across multiple protocols. It is difficult for individual developers to gain mass support and access multiple communities for their specific dApp initiative. This creates scale and speed barriers to adoption.
Cryptocurrencies on balance sheets
CFOs and corporate legal advisors are still hesitant to own cryptocurrencies and take on the risk of volatility on their balance sheets. Blockchain companies should simplify or mitigate this problem by tying fiat to crypto from the company’s balance sheet until regulations are clear and crypto matures with reduced volatility. This barrier is difficult to remove for crude protocols, which require companies to take a leap of faith and are considered unsustainable.
Operational risk management
Many new protocols first claimed to reject the Ethereum Virtual Machine (EVM) in the name of newer and more innovative technologies. However, as business needs arose, they sought stability, scalability, and interoperability. This has caused many protocols to invest in EVM compatibility (e.g. Solana, Algorand, etc.). Enterprises are also reluctant to deploy bridges given the security concerns surrounding them.
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Overcome the obstacles
There are a myriad of options businesses can adopt to overcome these obstacles:
Go low-code, no-code
Low-Code and No-Code options have entered the enterprise market at a very rapid pace. It has shortened development cycles and enabled citizen developers to quickly deploy applications. The programming languages around the blockchain (e.g. solidity, rust, vyper, Haskell, etc.) are complex, non-native to the enterprise, and talent is scarce. This is why low-code and/or no-code blockchain platforms are a possible solution.
Consider the factors of EVM-enabled blockchains
As mentioned earlier, EVM-enabled chains offer security, interoperability, and scalability of assets and capital; however, they also reduce the acquisition cost for developers. It can also exploit Metcalfe’s Law and Reed’s Law, driving network effects and providing access to scale and liquidity.
The future is multi-channel
Most large enterprises have multiple cloud providers, and blockchain is likely to play out similarly, mirroring typical enterprise behavior. It will also make assets portable across metaverses and games, while enabling access to loans and collateral across multiple blockchains, potentially driving wider adoption.
Pay in fiat
Until regulatory clarity is achieved and the market matures to a point where companies are comfortable paying gas fees, it may be best to insist on fiduciary payments to suppliers, platforms and to protocols.
Web3 is unlikely to rip and replace Web2 in business. Operating Web3 or blockchain projects in a silo is also not ideal. One needs to work with blockchains, integrating Web2 systems (e.g. CRM, ERP, identity, etc.), to maximize adoption and make Web2 and Web3 work seamlessly.
Perform adequate due diligence
Ensure that the product or protocol provider passes due diligence scrutiny of business, operational, technical, and human capital. Many companies (not all) are reluctant to take on the risk of unlicensed actors such as miners and validators. Using blockchains with KYC verified validators is also an option.
Investing in ecosystems
Developer tools, decentralized platforms, build kits, system integrators, use cases, and more make up the ecosystem that facilitates adoption. Businesses should seek out these technology accelerators to get proper fit and ROI from large-scale public blockchains.
As blockchain gears up for enterprise adoption, businesses and projects must adapt to the pace and movement of business. There are operational, business, technical, and regulatory considerations that are different from the blockchain-only world. Businesses and blockchain projects built only for Web3 may not find their product marketplace suitable for the business domain. Web3 and Web2 must work together to generate exponential value. Meanwhile, Web3 must prepare for Web2 to adopt it.
Nitin Kumar is a growth CEO and co-founder of zblocks. He is a recognized leader, author, former consulting partner and venture capitalist.
This article was published by Cointelegraph Innovation Circle, an vetted organization of senior executives and blockchain technology industry experts who are building the future through the power of connections, collaboration and thought leadership. The opinions expressed do not necessarily reflect those of Cointelegraph.
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