There is a great deal of confusion surrounding cryptocurrencies and blockchain technology. This stems from the fact that the industry is still very young, and much of the processes have not yet been streamlined. Startups are creating new models so quickly that the diverse landscape is overwhelming to most.
However, the potential benefits of the technology to almost any industry are so enticing that individuals and organizations are willing to pay money for research and professionals in the field. In fact, analysts predict that next year, enterprise spending on blockchain will double year over year, rising up to nearly $2.1 billion.
Deloitte Research Progress
As one of the world’s largest audit and consulting firms, Deloitte has taken the advent of cryptocurrencies and blockchain technology in stride. Since May, the company has published three in-depth research reports on topics relating to the industry. Their most recent study highlights their continued presence in the space as a progression of the previous two.
“Blockchain and the five vectors of progress” moves from assessing the state of the technology, professionals attempting to integrate it and public awareness to developing the critical directions the technology needs to move in order to bring all the potential benefits to light efficiently. “Five vectors” is a subtle, but important word choice.
Definition: “a quantity having direction as well as magnitude, especially as determining the position of one point in space relative to another.”
Everything is interrelated, but this is especially apparent with blockchain technology, where the ideals of open-source, decentralized networks of public transaction records constitute the founding principles. The first three vectors enhance technical feasibility. The next two help broaden the technology’s applicability to a greater number of use cases and industries.
Increasing throughput and performance
Slow transaction speeds are one of the main reasons for avoiding blockchain as a technology that can be applied in “large-scale applications.” However, IBM has tested a Hyperledger Fabric blockchain platform that achieved a 3,500 transactions per second with sub-second latency.
Enhancing standards and interoperability
This is a perfect example of why vector highlights the function of their research. The greatest benefits of blockchain networks come when the user base and the ledger of transactions grows. Currently, there are over 6,500 active blockchain projects on GitHub. These involve different protocols, consensuses, privacy measures. There is not even a standard coding language.
Reducing complexity and cost
Deloitte listed the necessity to reduce both costs and complexity of network operations, the importance of innovation-supporting regulation, as well as the crucial role of collaboration between blockchain-related firms.
This may be one of the most complex issues for the industry. Because of it’s novel structure as what many consider to the “Web 3.0,” current regulatory models simply don’t have a place for something like Bitcoin or smart contracts on the Ethereum network. In a recent Deloitte survey corporate executives, almost 25% cited regulatory issues as a barrier to greater investment in blockchain technology.
The growing number of consortia is both positive and negative. Private companies, Policymakers, regulators, and central banks are beginning to join or found and lead blockchain consortia. In the same previous study, 29% of respondents said their company was already participating in a blockchain consortium and another 45% said they were likely to join one. However, it is important that they don’t create tribal style competition, and still work towards the interoperability that could facilitate greater regulatory support.
By: BGN Editorial Staff