The Four Hurdles to Blockchain Adoption

The increasing number of blockchain patent filings in recent years shows a maturing and steadily growing industry; however, widespread adoption still faces considerable hurdles. The future of the blockchain landscape is likely a cornucopia of blockchains often tailor-made to solve particular problems in particular industries. All of these blockchains face, or will face, problems related to usability, interoperability, scalability, and privacy. Until solutions to these problems are developed, widespread adoption will be hampered.

What is a Blockchain?

A blockchain is a decentralized ledger of transactions maintained by a network of users that leverages cryptography and incentive mechanisms to secure the information stored in the ledger. The ledger consists of blocks of transactions linked together through cryptography to form a chain of blocks that grows longer over time as new blocks are added to the chain. The blockchain itself is a collection of blocks that contain every transaction on the network that ever occurred.

The properties of the blockchain create real digital scarcity and allow for secure transactions between two parties without relying on a trusted third party, such as Visa, PayPal, or the New York Stock Exchange. Transaction and block validation is handled by nodes in the blockchain network with the node operators incentivized with a potential reward of cryptocurrency (e.g. bitcoin, ether, or litecoin) for their efforts. These validating nodes store a copy of the entire blockchain that is used to verify the particulars of transactions.