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Why Is It So Hard to Trust a Blockchain?


A new PwC survey identifies the barriers to blockchain adoption, and how companies can overcome them.
By Steve Davies and Grainne McNamara.



The rate of adoption for an emerging technology is influenced by how well it is understood and trusted. Potential adopters may feel anxious, or at least skeptical, about embracing a wholly new system — in particular, one that requires companies to rethink traditional ways of managing and sharing their data. This is perhaps especially true for blockchain, a technology whose very purpose is to fill gaps in confidence.

Let’s dissect that paradox. Blockchain technology, by creating an immutable record of data transactions, should engender trust among its users. But survey data from a new global study by PwC reveals that trust issues are threatening to impede companies’ blockchain efforts at nearly every turn. This is not to say that companies aren’t experimenting: 84 percent of our survey respondents — representing a cross section of technology-focused leaders in 15 territories around the world — report at least some involvement with blockchain. To make the most of their initiatives, they’ll need to tackle their trust issues head-on.

As with any emerging technology, challenges and doubts exist about blockchain’s reliability, speed, security, and scalability. Such doubts are only compounded by concerns regarding a lack of standardization and interoperability across blockchain systems. Moreover, many executives remain uncertain about what blockchain is and how it will change their business. Blockchain’s role as a dual-pronged change agent — as a new form of infrastructure and as a new way to digitize assets through tokens, including cryptocurrency — is not easy to explain. Another challenge is building trust among participants: A technology meant to bring consensus hits an early stumbling block on the need to design rules and standards. There’s a similar lack of comfort regarding regulation. The majority of regulators are still coming to terms with blockchain. Many territories have begun studying and discussing the issues, particularly as they relate to financial services, but the overall regulatory environment remains unsettled.

What’s a company to do? Clearly, blockchain has arrived. And those that adopt a wait and see mind-set risk falling behind the competition. But as our report makes clear, leaders should not swing to the opposite extreme by jumping in unprepared. Of the survey respondents who report a blockchain project in the pilot stage, 54 percent say the effort sometimes or often hasn’t been justified by the result. This should be a call to more effective action. To help executives answer that call, the report offers four strategies that can be used to build trust. By focusing on these four areas early in their blockchain efforts, companies can set themselves on a path to successful execution.

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Friday, October 19th 2018
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