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3 Major Hurdles to Blockchain Adoption Explained

Blockchain Adoption

Blockchain as a concept was first formalized by Stuart Haber and W. Scott Stornetta in 1991. Its applications were later perfected by multiple contributors, most notably Santoshi Nakamoto in 2008 with the introduction of Bitcoin. Initially, Blockchain gained popularity as the technology that powered Bitcoin; but as the world figured out more about what a Blockchain is, more specialized and novel applications began to pop up. Today Blockchains have found uses within a wide range of industries from finance to healthcare, but the world is still miles away from the type of wide-scale adoption that enthusiasts and early adopters had hoped for. 

At its core, Blockchain’s nature of being decentralized, immutable, and trustless is what makes it so unique and appealing as a technology. Essentially speaking, a blockchain is a digital ledger, a copy of which is stored on multiple devices. Every time a user attempts a transaction or a new entry to the Blockchain, it is sent across the entire network. Nodes or computers that are a part of the Blockchain’s network proceed to verify the transaction independently. And if the majority of the networks “agrees” for a particular transaction to be valid, it is added to a block that becomes a part of the Blockchain. 

Since multiple independent nodes verify the Blockchain, no one single authority is in charge of approving transactions. This produces a consensus-based database that is decentralized. Of course, centralized blockchains can also exist where a single entity controls every node in the network. But decentralization is one of the most significant advantages of blockchain technology since it eliminates the need for any superseding authority, which could have ulterior motives beyond the needs of the network. 

Speaking of Blockchain’s advantages, immutability is another major one. Immutability basically refers to the fact that blockchains are unalterable. Meaning that the data, once entered into the Blockchain, cannot be tampered with. Blockchains accomplish this by utilizing hash functions. A hash function is used to meet the Blockchain’s encryption demand. It uses a combination of information consisting of data from the current block as well as the previous block’s metadata and more. Because the function’s output cannot be reverse-engineered, and since the output hash depends solely on the input given to the function, the process ensures that the Blockchain is secured in an unalterable chronological order. In simpler words, trying to change specific information or blocks on the chain would produce the wrong hash and thus break the Blockchain. Data security is encoded in the very process of writing a blockchain, which is what makes it immutable. 

And finally, trustlessness. Since traditional databases are centralized and often practically controlled by singular entities, the participants are almost always required to trust the central authority with their data. But with Blockchain being decentralized and much more secure, transparency is embedded in its very nature. Each node gets a copy of the Blockchain, and no central authority is required to validate the transactions.

Major Blockchain adoption challenges

Lack of Relevant Experience or Skill Gap

With so much going for the technology, why haven’t we seen Blockchain’s mass adoption in mainstream industries? The answer is simple: there are still a few major challenges that Blockchain needs to overcome. Let’s discuss a few of these below.

Although Bitcoin has been around for more than a decade, Blockchain as a technology is still relatively young. 

Given Blockchain’s infancy, it’s evident that there aren’t enough developers proficient with the tech. The learning curve can also be considered slightly steep. And the developers who are involved with Blockchain simply haven’t had the relevant work experience yet to qualify for any bigger or significant projects. 

To make it worse, the crypto space is highly volatile and disruptive even within itself. Every few years (and sometimes even months), new concepts, techniques, and innovations completely change the way things are being done. As a result, Blockchain itself has become an umbrella term that represents a wide array of tech with little in common. The downside of this rapid diversification is that there are simply too many areas to focus upon. 

The demand for blockchain developers has skyrocketed in the past few years. But despite the growing need, companies have been reluctant to invest in native talent and code, mainly because it can be extremely risky and resource-intensive. One possible solution to this roadblock is outsourcing. In other words, just as there are mobile app development and web development services available, custom on-demand blockchain development can be a type of service brands can outsource. This will boost blockchain adoption by reducing the investment businesses need to put in for experimenting with blockchain-based solutions.


No technology is perfect, and Blockchain is no exception. A few of the biggest roadblocks Blockchain faces are salability, efficiency, and speed. Consider the example of Bitcoin. Bitcoin’s Blockchain has a fairly simple purpose, to keep track of bitcoin transactions. However, it can only track so many of them; once the number of transactions increases beyond what is achievable in real-time, we begin to see long queues and increased waiting time.

That’s bitcoin’s bottleneck. Bitcoin’s Blockchain is difficult to scale up to a point where it’s on par with traditional financial systems. And a lot of its limitations come from the consensus mechanism Bitcoin relies upon. Bitcoin’s protocol is based on a Proof of Work (PoW) type of mechanism that essentially requires nodes to “work” to validate transactions. In simpler words, nodes need to solve complex hash problems to get a chance to verify the next block in the chain.

In such a setup, the protocol incentivizes the miners to offer their computing resources in exchange for freshly minted Bitcoins. But since miners are essentially competing with each other to win the prize, PoW mechanisms aren’t the most efficient, especially given the high computational costs involved. For these reasons, Bitcoin’s protocol often gets criticized for being sluggish and energy inefficient. 

Faced with such challenges, the next generation of blockchains set out to do better. Ethereum is a good example of this as it is more than just a cryptocurrency at this point. By supporting features like “Smart Contracts” and dapps, ethereum has established itself as an important protocol, although it still struggles with the same scalability issues as Bitcoin. At least until Ethereum successfully transitions to a Proof of Stake mechanism, the problem is bound to remain. Numerous solutions like Sharding and off-chain scaling have been proposed to address the scaling problem. The effectiveness of these solutions though, is yet to be determined.


And the final major challenge to blockchain adoption is making the technology more accessible. On one end, we have a lack of trust, where most organizations doubt that blockchains can be a secure and reliable solution to their problem. On the other, institutions are unaware of how blockchains can benefit their operation. And hence, despite there being multiple practical use cases for Blockchain, the technology struggles with adoption. 

Another hurdle here is the lack of regulation. Blockchain being a relatively new and decentralized technology has caused a ton of confusion and ambiguity around its regulatory status. Governments all around the world are still trying to grapple with the issue of regulating Blockchain. That’s part of the reason why major institutions are holding back from investing heavily in Blockchain. Better to wait for the political fog to clear out than dive head in and regretting later down the line in the face of disruptive regulations.  


To sum it up, Blockchain is still an upcoming technology with massive potential and promise. And while it is easy to discount its lack of adoption as a failure, the truth is that, like all technologies, it simply needs more time to be fully viable. 

Over time blockchain is bound to get much more scalable, faster, efficient, and reliable. Meanwhile, as new developers join the ranks and older ones gain greater experience, eventually, the skill gap is sure to shrink down further if not disappear altogether. Within the span of a few years, as the technology will continue to get more traction, clear and supportive government regulations are likely to be put in place. And all these effects combined will boost corporate confidence and lead to much greater local and global blockchain adoption. 

All in all, Blockchain’s significant challenges all seem manageable over time. And knowing how efficient Blockchain can be at solving some of the major problems it sets out to address, Blockchain’s eventual mass adoption shouldn’t come out as a surprise.

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