Published on the 28th of September and titled “Blockchain and the five vectors of progress”, the report goes into depth on the signals suggesting mainstream adoption of distributed ledger technologies (DLT) might be close.
The report starts out explaining that blockchain is able to streamline business processes, enable new business models, and even create new business models. And, if well incorporated, the technology can make it possible for organizations to reduce costs, improve efficiency and effectiveness, and increase revenue by creating new products and services.
However, despite the widespread enthusiasm over blockchain and distributed ledgers, and what they are able to bring to the table, the fact is that a number of obstacles have kept the technology from being fully adopted. The authors of the report, three Deloitte managers based in Mumbai and New York, then proceed to identify five key vectors of progress that, if well addressed, will push blockchain adoption.
The Five Vectors of Progress
Increasing throughput and performance is the first vector. It essentially tackles the old problem of scalability. Most blockchains are not viable for large-scale applications, as they can only handle a very limited number of transactions per second. The solution seems to be the evolution of consensus mechanisms, as they can improve blockchain speed, capacity and performance significantly.
The second vector is enhancing standards and interoperability. There is no standard programming language, protocol, or consensus mechanism when it comes to crypto.
Standardization could greatly contribute to enterprises adopting cryptocurrencies, as it would facilitate collaboration on application development, validate proofs of concept, and easily share and integrate blockchain solutions with existing systems. The other factor, interoperability between blockchains, will also have a great impact in crypto adoption, the report contends, as it enables cross-blockchain transactions and interconnectivity.
Reducing complexity and cost, the third vector addresses the difficulties of building and adopting blockchain applications. Fortunately, many new software platforms and cloud-based solutions are now dedicated to offering easy-to-use blockchain tools and platforms, leading the authors of the report to conclude that this particular vector is rapidly progressing and is sure to positively impact adoption.
The fourth vector is related to regulation. A double-edged sword, regulation could greatly benefit crypto adoption but it can also delay the whole process. When government regulation is unfavorable it serves as a huge barrier of entry for both investors and enterprises. The authors conclude that there are still many regulatory hurdles to get past before we can have mainstream adoption.
The final vector is multiplying consortia. Blockchain consortia are groups of companies that have shared objectives for the technology. They end up collaborating to define use cases, setting standards, developing infrastructures and applications, or creating blockchain applications. This vector is the easiest to interpret, as the number of participants in the industry is proportional to the size of the industry.
Deloitte and Blockchain
Crypto-friendly Deloitte has been actively involved in the cryptocurrency ecosystem for some time now. With a considerable amount of crypto-related blog posts on their official website, the company has been quick to position itself to embrace the rapidly evolving blockchain economy.