What is holding back the adoption of blockchain in the business world?
Some researchers argue that the current state of blockchain technology adoption is comparable to that of the Internet in the 1990s. Adoption is now expected to accelerate. For example, the Boston Consulting Group forecasts one billion cryptocurrency users by 2030, which would represent an increase from 4% to 12.7% of the global population 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 functions as a kind of distributed and decentralized ledger, where each transaction is recorded chronologically and verifiably through a series of cryptographic codes. This technology can be used in many fields, such as payments, smart contracts, product traceability, digital identity management, and more.
As a result, morecompanies are considering adopting this technology to transform their operations and gain a competitive advantage. A study conducted by CasperLabs and Zogby Analytics among 603 corporate decision-makers 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 notes that 87% of the companies surveyed plan to invest in this technology later this year.
Still limited use
Like the studies cited above, the results of our study, published in 2022 in the journal Planning, Production & Control, show that blockchain technology is generating significant interest, but the intention to adopt it remains significantly higher than the actual adoption rate. The objective of this research was to understand the factors that influence the adoption of blockchain, particularly by examining the role of so-called “change agents.”
The study examined responses from fourteen experts working at consulting firms such as BCG, PwC, Accenture, Deloitte, and Wavestone, as well as experts working at companies specializing in the development of blockchain solutions (SmartB, Consensys, Kapalt, ChainHero, and Ticket 721).
These experts have identified several factors influencing the adoption of this technology. Among the barriers to adoption, so-called non-technological factors play a major role. Thus, ethical and environmental considerations, as well as a lack of knowledge and expertise, are slowing down its adoption. As one of the experts interviewed points out:
“Today, people are still wondering what a blockchain is. This is what we call technological evolution—it will come in time. Right now, we’re in the process of developing our understanding of blockchains.”
Furthermore, experts agree that, at this stage, adoption will occur either transparently (i.e., unconsciously) or as a result of a crisis, such as a political or economic crisis. One expert points to the South American precedents:
“In some South American countries where the currency is in crisis, such as Venezuela, people have taken their fate into their own hands without relying on their government and are turning heavily to 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 issue of ethical responsibility, it is complex and controversial. Some of the experts interviewed believe that technology is ethically neutral, while others take a more definitive stance, either positive or negative.
The main areas of focus are transparency and governance. A high level of transparency carries a high risk of exposing private data. Therefore, when developing a blockchain project, it is essential to consider the governance model by determining which parties have access to the ledger, as well as each party’s responsibilities and authority. If the technology is misused, who is held accountable?
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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 process demands significant computational 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 more energy-efficient (although no comparative figures have been officially released).
SmartB is an example of a company developing a Proof-of-Authority (PoA)-based blockchain. According to the company’s technical experts, a Proof-of-Work (PoW) Ethereum transaction consumes 1,500 times more energy than a transaction carried out on the PoA-based SmartB blockchain. The company aims to adopt a sustainable development approach, thereby significantly reducing its energy footprint while ensuring the authenticity and security of transactions conducted on its platform.
Finally, understanding what a blockchain is and what it can do is essential for wider adoption. Indeed, an innovation, no matter how disruptive, must be understood in order to generate sufficient interest to be accepted and to trigger the phases of adoption, implementation, and routine use. Without this, adoption will occur either transparently (unconscious use of blockchain through a user-focused use case) or under duress (a crisis situation). For a more “deliberate” adoption, awareness-raising is therefore necessary, primarily driven by the agents of change, which today include, among others, consulting firms and expert startups.
Marroi Laaraj, Ph.D. candidate, 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 Chair in Social Entrepreneurship and Inclusion, Montpellier Business School
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