The pandemic had already raised questions about the world’s reliance on an economic model that has broken trade barriers, but made countries heavily reliant on each other – Copyright AFP John MACDOUGALL
Blockchain technology has been making waves in various industries. The concept, especially for supply chains, promises increased efficiency, transparency, and security. However, despite its potential, the technology is often misunderstood and plagued by a “blockchain bias.”
This is something that has been detected by the founder of blockchain storage firm Züs, Saswata Basu. The technologist is keen to address the misconceptions surrounding this innovative technology, as he explains to Digital Journal.
According to Basu, there are six essential reasons behind the “blockchain bias”. These are:
Lack of Understanding
According to Basu: “Many people are intimidated by blockchain technology because it is a relatively new concept and often misunderstood. Despite the complex underlying technology, the basics of blockchain are quite simple: it is a linked list of transactions that are an immutable and transparent way to payments and activities across a distributed ledger without reliance on third-party services or trusted entities”
Security Concerns
People might fear that blockchain technology has too many security weaknesses and could be easily exploited by malicious actors. With this Basu counters: “In reality, however, blockchain technology is one of the most secure options available today as data stored on the blockchain is incredibly difficult to manipulate or tamper with in any way.”
High Cost of Implementing Blockchain
Basu acknowledges that the equipment and energy cost involved in operating a blockchain system can be quite high. This is: “Due to the need for specialized hardware and software resources required to maintain the network”
Yet when costs are balanced, Basu observes: “Recent blockchains are efficient and can use the same power as your laptop to operate a node on the chain.”
Scalability Issues
Due to its decentralized nature, scaling up a blockchain network can be difficult as more participants join the network and require additional resources such as storage space or computing power.
There are solutions, explains Basu: “Innovations like sharding are helping to address this issue and make scalability much easier for all types of projects ranging from small startups to large enterprises.”
Lack of Regulatory Framework
Although governments around the world have been taking steps towards regulating cryptocurrencies and other associated technologies, there remains no clear global framework for governing these systems.
While this may cause some confusion among potential adopters who do not know what rules they must abide by when using them, Basu reassures: “There has been some guidance based on SEC actions in a few categories such as DeFi and Staking projects.”
Adoption Challenges
Despite its many benefits, adoption of blockchain technology has been slow due to unfamiliarity with its concepts and applications as well as an overall lack of awareness about how it can benefit businesses or individuals on a practical level.
This will change notes Basu: “As more people become aware of how transformative blockchain technology can be for certain industries, we should expect to see increased adoption over time.”