Blockchain is being touted as a game-changing technology for enterprises of all stripes, whether as a capital-raising tool, a new consumer payment option, or a way to improve supply chain management. But despite plenty of trials and pilots from big-name firms like IBM, many enterprises remain resistant to blockchain – and the best way to break down that resistance may be to stop talking about blockchain.
That was some of the wisdom handed down from a panel of experts at the Hong Kong Blockchain Week conference earlier this month. It doesn’t mean blockchain and cryptocurrency should just go away – it means companies selling blockchain-related solutions and services to enterprises need to offer real solutions that make sense for them regardless of the underlying technology.
Leah Callon-Butler, co-founder and chief impact officer of Intimate.io – a startup that developed a blockchain-based payments platform for the adult industry – said that blockchain isn’t an attractive tech solution for many enterprises just now because it’s still early days for the technology.
“If we’re honest about blockchain, it’s still got scalability issues, it’s relatively clunky, and the UI sucks on a lot of apps”
That said, enterprises do see value in blockchain – provided you focus on the solution’s benefits rather than harping on about the blockchain or crypto bits, she added, saying that pushing the blockchain angle would be like trying to convince someone to set up an e-commerce business by first explaining how the internet works.
“At the moment, that’s what merchants feel like with blockchain … We need to be looking at the enterprise and how do we actually speak within the existing language rather than just pushing blockchain all the time,” she said.
In other words, the underlying blockchain technology is irrelevant – it’s the value-add of the solution that matters.
Marisol Park, head of research and strategy at Orichal Partners, noted that while there’s a lot of R&D happening with blockchain in her home base of South Korea, it’s not very well publicized, but that this won’t impact blockchain adoption because most commercial implementations of it will be off-camera, so to speak.
“A lot of corporations like Samsung or LG will be able to implement [blockchain] without people knowing it, which is, I think, the best way for it to be adopted,” she said.
More barriers to adoption
That said, there are more barriers to enterprise adoption of blockchain besides a lack of technical comprehension, observed Bowie Lau, founder of MaGESpire and chair of the Association of Family Offices in Asia.
“Enterprise adoption is happening, but one specific area that I think is still lacking for enterprise is decentralization,” she said. “They still want to take full control inside the company, which is totally understandable. To really have a decentralized framework when they still have a very highly intense centralized backbone, that’s still a question for enterprises to solve.”
Another barrier to adoption is that when large corporations adopt blockchain, they have to convince their smaller partners to also adopt it, said Park of Orichal Partners.
“The corporations at the very top have to force smaller players to use the blockchain, and they don’t really understand why,” she said. “And it’s very difficult to implement. That’s why there’s a there’s a wall to implementation. Everyone knows the concept of why it should be implemented, but implementation is very difficult.”
Even in the payments sector – where application of blockchain would seem like a no-brainer – there are a number of adoption barriers, admits Callon-Butler of Intimate, chiefly on the consumer side of the retail business – namely, even people who possess cryptocurrencies rarely if ever use it to pay for anything other than buying or selling more crypto.
“This was quite a learning curve,” she said. “I was really naïve. I thought that this would be easy, and it hasn’t been.”
Lau of MaGESpire added that it’s difficult to get consumers who don’t know much about crypto to trust it because of all the negative press last year about ICO scams, regulatory crackdowns and Bitcoin’s rollercoaster ride in value.
“In general, people are traditional, and they don’t feel comfortable with it,” she said. “So it will be challenging for it to see massive adoption.”
Callon-Butler admitted that many merchants have similar reservations about crypto as a viable payment option. “They don’t want to hear about crypto – I’ve had it called magic beans, snake oil, Monopoly money.”
Complicating matters is the fact that there are already plenty of digital wallet apps enabling easy payments – and those apps involve what people think of as “proper” money.
“We have PayPal, WeChat Pay, Alipay, and they are ahead of the game,” Lau said.
Callon-Butler said this is why she thinks crypto payments – like blockchain in general – will gain traction first in areas where even popular digital wallets or online payment providers aren’t much use, such as populations where most people have no bank accounts or sufficient ID documents to open one.
“I think we need to see where those markets are where they’re desperate craving alternative payment solutions,” she said.
And of course, they have to make it a lot easier to use – both for consumers attempting to pay with cryptocurrencies or merchants wanting to enable themselves to accept it. “I think the companies that’ll really win out will be the guys or gals that are focusing on really streamlining that process.”