What is holding back the adoption of blockchain in business?
Some researchers claim that the current state of blockchain technology adoption is comparable to that of the internet in the 1990s. Its spread is now expected to accelerate. For example, the Boston Consulting Group predicts that cryptocurrencies will have one billion users by 2030, which would represent an increase from 4% to 12.7% of users worldwide in less than a decade.
Marroi Laaraj, University of Montpellier; Samuel Fosso Wamba, TBS Education and Walid A. Nakara, Montpellier Business School
Blockchain is a technology for storing and transmitting information that allows individuals or organizations to share a common, verifiable database in real time, without the need for a trusted third party to guarantee the authenticity and integrity of the data. Blockchain works as a kind of distributed and decentralized ledger or account book, where each transaction is recorded chronologically and verifiably using a series of cryptographic codes. This technology can be used in many areas, such as payments, smart contracts, product traceability, digital identity management, etc.
Morecompanies are therefore considering switching to this technology to transform their operations and gain a competitive advantage. A study conducted by CasperLabs and Zogby Analytics among 603 decision-makers in companies located in the United States, the United Kingdom, and China indicates that 90% have already implemented blockchain. The adoption curve looks positive for 2023, as the study also states that 87% of the companies surveyed plan to invest in this technology during the year.
Still used sparingly
Like the studies cited above, the results of our study published in 2022 in the journal Planning Production & Control show that blockchains are generating a lot of interest, but the intention to adopt them remains significantly higher than the actual adoption rate. The aim of this research was to understand the factors that impact the spread of blockchain, in particular by examining the role of so-called "change agents."
The study examined responses from fourteen experts working in consulting firms such as BCG, PWC, Accenture, Deloitte, and Wavestone, as well as experts working in companies specializing in the development of blockchain solutions (SmartB, Consensys, Kapalt, ChainHero, and Ticket 721).
These experts identified several factors influencing the spread of this technology. Among the barriers to adoption, non-technological aspects play a major role. Ethics, environmental considerations, and a lack of knowledge and expertise are slowing down its spread. One of the experts interviewed emphasized this point:
"Today, we are still wondering what a blockchain is. This is what we call the updating of technologies; it will come gradually. Right now, we are in the process of constructing mental models around blockchains."
Furthermore, experts agree that at this stage, adoption will occur either transparently (i.e., unconsciously) or imposed by a crisis context such as a political or economic crisis. One expert recalls the South American precedents:
"In certain South American countries where the currency is failing, such as Venezuela, residents have taken their destiny into their own hands without relying on their government and are relying heavily on cryptocurrencies. Not because they are seeking innovation and new business models, but rather to save their families and protect their savings."
An essential understanding
As for the question of ethical responsibility, it is complex and controversial. Some of the experts interviewed consider technology to be ethically neutral, while others have a more clear-cut view, either positive or negative.
The main points targeted are transparency and governance. A high level of transparency implies a high risk of exposure of private data. Thus, when developing a blockchain project, it is essential to consider the mode of governance, determining which actors have access to the ledger, as well as the responsibility and authority of each. If the technology is misused, who is responsible?
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The environmental impact of blockchain is also a major topic of debate, particularly due to the use of the proof-of-work (PoW) consensus protocol. PoW requires miners to solve complex mathematical problems to create a new block. This requires significant computing power. However, less energy-intensive consensus protocols have since been developed. The use of proof of authority (PoA) is one possible solution. PoA follows a consensus mechanism in which a small number of trusted entities are responsible for validating transactions and adding new blocks. This process is faster and less energy-intensive (however, no comparative figures have been officially released).
SmartB is an example of a company developing a PoA-based blockchain. According to the company's technical experts, a PoW-type Ethereum transaction would consume 1,500 times more energy than a transaction carried out on the PoA-type SmartB blockchain. The company wants to be part of a sustainable development approach, thereby significantly reducing its energy impact while guaranteeing the authenticity and security of transactions carried out on its platform.
Finally, understanding what blockchain is and what it can do is essential for wider dissemination. Indeed, an innovation, however disruptive it may be, must be understood in order to generate sufficient interest to be accepted and trigger the phases of adoption, implementation, and routine use. Without this, adoption will occur either transparently (unconscious use of blockchain through a user-focused case) or forcibly (in a crisis situation). For a more "deliberate" adoption, awareness-raising is therefore necessary, mainly provided by agents of change such as consulting firms and expert start-ups.
Marroi Laaraj, PhD student, University of Montpellier; Samuel Fosso Wamba, Professor of Information Systems and Data Science and Director of Research, TBS Education and Walid A. Nakara, Professor, Director of the Social Entrepreneurship and Inclusion Chair, Montpellier Business School
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