With Blockchain technology developing at a rapid pace, businesses must be aware of the challenges that all users face. Being relatively new technology, Blockchain still poses many challenges for first time users. Understanding these challenges is critical in developing effective use of Blockchain technology, for all business applications.
1. Digital security
Although Blockchain is a far safer alternative to human based ledger systems, Blockchain can still be vulnerable to cyber and denial-of-service attacks. This poses a large threat to businesses that are trying to keep their Blockchain applications safe and secure. Utilising Artificial Intelligence can be one way of protecting privacy, but anti-virus and anti-hacking measures must also be put into place at the highest level possible. It is one thing to implement Blockchain technology, but it is another to keep it running and safe from malicious attacks.
2. Cost of operations
Blockchain is a very complex piece of technology, and so it can prove very difficult to contain costs of rapidly expanding IT departments and the need for expert personnel. Blockchain budgets can quickly grow out of control, and if not checked, can lead to the failure of the entire project. Furthermore, it can be hard to assess the ROI for Blockchain, especially when you are dealing with new technology and applications that do not yet have standard practices. Even extra costs such as Blockchain training courses can quickly add up. It is therefore important to ensure that your company has enough resources and a large enough budget before using Blockchain technology.
3. Increasing competition
The majority of financial institutions currently use Blockchain for one application or another. It is no longer enough to use standard processes, with increasing competition and Blockchain becoming more readily available. It is therefore critical to develop market differentiation for any company looking to harness the power of Blockchain technology. Businesses must put extra resources into R&D, in order to develop new Blockchain applications and cement themselves in a rapidly expanding market. Price and application speed are no longer enough for differentiation. New, innovative processes must be developed for a company to become a key player in the Blockchain market.
4. HR strain
Blockchain technology is very complex, especially for those that do not have an IT background. Departments such as Sales, Marketing and Legal may not have the technical expertise to be able to effectively understand Blockchain from a business point of view. Blockchain can put a large strain on HR, as employees must be educated on Blockchain through Blockchain training courses. This can cause conflicts, as many employees will have to take time out for training, putting a strain on the overall business. With a large budget in place for Blockchain, it is possible that other departments could suffer, with reduced capacity and budget at their disposal. It’s therefore important to ensure that HR planning takes place before Blockchain technology is implemented, as staff will be crucial in maintaining the systems and ensuring that the Blockchain processes remain profitable.
5. Data analysis
Blockchain technology contains a huge amount of data that must be analysed in real time. This data is critical, is it is used in smart contracts and instructions for customers. This poses a huge threat to businesses as all this analysis must be written up, and explained to clients as quickly as possible. This would mean hiring more research and analytical staff, alongside developing new training processes to increase work efficiency. This would prove very difficult without the proper Blockchain training, so it is important that staff are educated to improve their knowledge.
While Blockchain is an exciting new technology, there are still many business issues to consider before taking the plunge and investing. Digital security, high cost of operations and increasing competition are arguably the most pressing issues that a business will face in the ever-changing Blockchain market.