A recent report, ‘Blockchain in Europe: Closing the Strategy Gap’, conducted by Cognizant, reveals there are several internal barriers stopping blockchain from becoming impactful. These include truly understanding use cases, and assessing their costs and benefits (51%).
Yvonne Zhang, CEO and co-founder of tech outfit Aquifer Institute, says there is a lack of willingness from decision-makers to understand how blockchain works and how they can use it.
“In terms of working with individuals or large corporations, I would say up to 90% of people, from the companies that I've encountered, have explicitly said they have no interest in understanding the development of the technology that they want to use,” says Zhang.
“Blockchain is such a hot buzzword that there is almost pressure for everyone to be involved somehow, but nobody wants to put the work in to understand it because it's actually quite technical.”
According to the report, only 2% of businesses are willing to collaborate on their blockchain strategy.
Talking about the hype that has been surrounding blockchain, Zhang says: “Any incremental benefits of implementing a back-end solution is only realizable when the whole ecosystem adapts to it. I would say the situation is actually similar to the dot-com bubble, where everyone wanted to register a domain name but nobody wanted to build an e-commerce model.
“So, in this case, it's hilarious coming from that perspective to see the misinformation that has been circulated amongst a lot of folks that are interested in going into the blockchain world. The first principled approach of knowing and learning is by taking a hands-on approach to doing, but this is not a commonly adopted method of engagement in this community right now.”
The report surveyed over 1,500 decision makers across Europe's banking and financial services sectors, manufacturing, retail, healthcare, and insurance industries.
The research highlights that, while there are breakthrough ideas on how blockchain could solve some of the most pressing problems in business and society today, there are challenges turning those ideas into reality.
“How do you collaborate if you don't know what you're doing in the first place and are unwilling to actually know,” says Zhang.
“You would assume that some folks that are involved in tech or developments of new solutions on the blockchain would be willing to learn or put their hand to doing something solid with the technology.”
The study also shows that more respondents are experimenting with private, or permissioned blockchain models (40%) rather than open, or public blockchains (39%). This is due to public blockchains being seen as a bigger data security risk.
“Everyone is looking for partnerships to drive mass adoption,” says Yasin Sebastian Qureshi, CEO of German fintech NAGA group AG.
“I just had three meetings in Frankfurt which were just about collaboration, open APIs, etc. However, with the established players, if you talk about the banks, the exchanges, etc, due to their mindsets having grown up in secluded worlds rather than an open API world, they're absolutely not interested in partnering beyond the experimental level,” says Qureshi.
“If you speak to banks, just due to their compliance paranoia in their mindset, which is basically a result of over-regulation because their systems are not designed, neither are their mentalities nor is the environment, for established players,” says Yasin.
Speaking on the regulators' involvement in blockchain, Qureshi says they need to clear up their stance on blockchain regulation in order to encourage others into the market.
“I think it's long overdue that the regulators have a clear or firm opinion on it because that's the biggest hurdle right now. People think it's unregulated, that there is no legal certainty, that there is no such thing as rule of law,” says Yasin.