The challenges for massive blockchain adoption

Blockchain has the potential to change every industry out there. It’s regularly called the most disruptive tech for a reason. Blockchain’s immutability, peer 2 peer network features make it very desirable but like everything it comes with its fair share of challenges.

In January 2020, the Indian Government with PwC carried out some studies across the nation to figure out where and how can blockchain be used. There are four areas in which the government experimented with blockchain and tried to establish the advantages , disadvantages and challenges of a possible massive scale adoption of this wonderful technology. The four areas are :

1. Claim verification and approval in fertilizer subsidy : India is an agriculture based economy. Farmers are provided fertilizers at a subsidized rate. This subsidy is paid directly to the manufacturer. This is the second largest subsidy program for the country and therefore a very complex one with the involvement of various agencies and a large paper based legacy system. The goal of introducing a blockchain based system in this scenario is to improve transparency and reduce the number of intermediaries. Blockchain is capable of providing trust and transparency in such where multiple parties are involved. After all that is the primary purpose of a blockchain.
2. Improving the tracking of drugs in the pharma supply chain : The supply chain management of drugs comes across as on of the most intuitive use of blockchain. By facilitating easier access to tracking data at each step of the supply chain , this technology can provide what has been lacking in the system for a long time, real time monitoring of the supply chain. It also solves a much bigger problem by allowing people to trace the origin of drugs thus providing an effective tool against fake drugs.
3. Verification of university certificates : The business of fake university certificates is a big one in India and the middle east. Fake certificates are easily available for people looking for them. A big scam is carried out by providing fake certificates from real university or degrees from fake university. There are more than 7500 organizations currently participating in this fraudulent act. Blockchains can provide a complete solution to this problem by providing independent tracing and verification of student identity, certificate authenticity but such a system requires control by a central authority
4. Transfer of land records : In India land ownership is one of the many topics that have been carried over as it is from the British Raj. Land ownership is mainly transferred through a registrar but this too is subject to challenges as it is only a record of transfer and not a guaranteed transfer of property. Land ownership cases form a large number of pending cases before the judiciary. Blockchains immutability can provide traceable, dispute free records in this case.

These cases were then tested in the real world on small level by blockchain based prototypes.

Here are some of the major challenges that were highlighted :

• Single source of truth for data : Government structures are very complex. Lots of departments communicating with each other having shared operations. Blockchains require the data entry to be correct and error free at the point of entry because of its immutable nature. Quite difficult to ensure this in large complex organization. A lack of dispute free data constraints the scalability of blockchain based solutions.
• Major changes to legacy systems : Blockchain solutions require changes in traditional processes. Carrying out a change in the traditional processes of doing things so that they can be deployed on a blockchain causes reluctance in the stakeholders. Also it is cumbersome to integrate blockchain solutions to already existing complex legacy systems on a large scale. Even blockchains most popular use cases like ethereum are struggling with scalability.
• Legal and regulatory modifications : Blockchain deployment reduces the need for ‘traditional intermediaries’, instead recognizing the blockchain platform as a trusted entity to enable transactions. Blockchains offer a means to eliminate cumbersome physical verification processes. But these changes require a large change in current regulations and laws (in some cases).

There are a few other challenges that hinder the large scale adoption of blockchain based solutions like cost of implementation, lack of human resources and a small developer community are some of them.

Cryptocurrencies might have come a long way when it comes mass adoption but blockchain based solutions to large scale problems require the whole community to address these basic issues before it can go mainstream.

If you want to know about the basics of blockchain check out this video :