Will Corporations Adopt Blockchain?
Blockchain became a vital part of the modern economy. But is this trend likely to continue in the future?
In the recent Weekly Update, I mentioned about attempts to raise awareness of the blockchain technology made by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Blockchain technology is lately believed to be a perfect solution for improving any possible industry. A universal remedy for ills of centralized systems. But what if some companies don’t want to be cured? Moreover, what if this solution isn’t universal at all?
Education for corporation
For those who haven’t read the latest Weekly Update: this definitely too long name refers to a joint initiative of some US-based private organizations, which the main goal is to educate corporations about business ethic and proper functioning on the global market. Noble assumptions – yet tough in realizations.
COSO’s decision to lecture about blockchain seems to be fair, taking the goals of the organization in an account. The concept of distributed ledger, cryptocurrencies, and other aspects of this technology might be confusing for people who haven’t met with this idea yet.
Of course, there are already many companies which successfully introduced this technology – and we frequently mentioned them on our website. From big players like Microsoft (and its blockchain project named Microsoft Azure) or Facebook, which is currently working on Libra, to lesser-known, small businesses that decided to take advantage in this field. But are those examples mean that blockchain will become a common trend?
The advantages of blockchain technology are widely known in the cryptocurrency industry. However, it is worth to take a closer look at possible outcomes of implementing it into a firm that hasn’t used it before. Both large companies and small entrepreneurs may benefit from profits brought by a distributed ledger.
And those profits are indeed attractive. If applied correctly, blockchain might effectively improve the overall performance of the company. Decentralization of distributed ledger brings better transparency of all data, which furthermore increases efficiency and cuts costs of maintaining the business. It also contributes to increased security.
There is also a social aspect of implementing blockchain. Alongside with popularizing cryptocurrencies, this technology became a growing trend, which slowly began to spread in many different industries. Introducing it into the company may be as well a PR decision, showing that our firm goes with the times. However, it also leads us to some problems.
Some flaws on the diamond
The problem with adopting blockchain lies in the understanding of its possibilities. The rising popularity of this technology caused it to be considered as a miraculous solution, certainly boosting any industry. However, it needs to be applied carefully, with a proper understanding of both the technology and the particular environment where it is going to be introduced. When used hastily, blockchain won’t improve the performance of the company.
Moreover, some companies might not be eager to have their systems decentralized and transparent. From such a perspective, blockchain might be seen as something which causes disorder in already well-established systems. And even if this technology would indeed improve the performance of such business, forcing it in such cases won’t bring any good.
There is also the aspect of potential abuses related to blockchain – but this matter mostly applies to the context of cryptocurrencies. Controversies caused by Libra sparked an ongoing discussion about the security of decentralized assets. One of the concerns is the possible scenario when the technological company begins to function as a financial institution. It eventually led to proposed legislation in the United States Congress to prohibit them from issuing digital assets.
Misunderstandings of the blockchain technology and concerns about eventual abuses show initiative taken by COSO is both commendable and much needed. Educating about its possible uses may contribute to popularizing this idea, alongside with avoiding potential harms.
On the other hand, we can’t fall in a tendency of forcing blockchain solutions in every possible industry. In some cases, it might be an unnecessary or unwanted improvement. Whenever this technology is to be introduced, it needs to be a deliberate decision, dictated by some actual needs.
The time will show how blockchain will be received by corporations in the near future. As for now, it still remains relatively unknown for a broader audience. But its trending popularity is something to be reckoned with, and the usage of this technology is likely to increase even more. And even if they are some potential threats related to it, I bet the positive outcome of the broader implementation of blockchain will overcome them.
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