There is a lot of excitement around blockchain right now, for a good reason. Production use cases continue to emerge across sectors such as manufacturing, energy, air travel, insurance and finance. Gartner predicts that by 2023, organizations using blockchain smart contracts will see a 50% increase in their data quality.
Yet, Gartner also predicts that blockchain will reduce data availability by 30%. Before its use can reach ubiquity, blockchain-based application development has some hurdles to overcome. And if enterprises are to get on board, executives will need to see tangible proof of its value in the form of reduced expenses and increased profits directly correlated with blockchain adoption.
“Enterprises aren’t going to change their business model to adopt a new technology,” said CasperLabs CEO Mrinal Manohar. Just as it’s difficult to dramatically alter the UX for established products, it’s similarly difficult to change the developer experience for established software production routines.
I recently met with Manohar to discuss the limitations and the changes required to accelerate enterprise blockchain adoption. According to Manohar, much of it boils down to taking a DevOps approach—reducing energy use, enabling CI/CD, ensuring stable development environments and providing room for change and ongoing testing—will be critical to spur adoption. This could also mean abstracting complexity away from the developer and end users. However, once more production proofs are out there, the shift toward blockchain will be swift and it will be massive.
What’s Hindering Enterprise Adoption?
Enterprise adoption comes down to UI and UX, said Manohar. He predicts blockchain will follow a similar path as the internet. In its command-line days, the internet was only adopted by die-hard techies. But once visual-based actions were possible through the browser, consumer interest exploded.
Similarly, blockchain might see more production use once the complexity is pushed to the background. “A technology is awesome when it’s 99% invisible,” said Manohar. However, at the moment, blockchain is 99% visible, he adds. For example, it isn’t easy to spin up a node and test a blockchain app. Lowering the requirements to 50% with more abstraction, simulation and integration with cloud providers could help tremendously.
In general, Manohar believes that four key factors are hindering enterprise adoption:
- Enterprises need a lower energy footprint. Attaining high throughput on a public network without sacrificing decentralization and security is tricky. If blockchain drains operations when scaled, organizations may simply opt for a centralized data store. Therefore, enterprises will require a blockchain with minimal energy requirements.
- Large companies want developer environments that are similar to what’s already in place. In many ways, blockchain throws out the old playbook. But such a significant shift is a hard sell across multiple IT divisions. Large companies will require blockchain abilities that plug into the existing developer stack. Using a blockchain with familiar programming languages and plugins to popular IDEs like Visual Studio and IntelliJ will decrease onboarding effort.
- They need more control. Blockchains typically use immutable contracts. This is great for sustaining a shared distributed history, but Manohar believes that contracts need to be more malleable to enable continual upgrades. Furthermore, there is the issue of privacy when adopting blockchain. Some implementers don’t want all 100% of data to be on the public chain. Having the ability to maintain both private and public nodes for smart contracts could help enable more flexibility.
- Enterprises want ongoing support. Some companies will be autonomous using open source, but most enterprises will not adopt new or emerging technology without a support email attached to it, said Manohar. Thus, there may be a need for professional services and outsourced blockchain experts.
Applying a DevOps Perspective
Another big boon to accelerating blockchain adoption could be considering a DevOps perspective. To Manohar, introducing DevOps into blockchain requires more continuous updates, mitigations to avoid breaking change and simulations to enable better testing environments.
An immutable blockchain infrastructure seems to be at odds with the DevOps creed of rapid deployment. Thus, Manohar said that choosing a blockchain that enables more mutability will help upgrade contracts and allow functionality to change over time. For core infrastructure changes that affect the entire public chain, the majority of validators must, of course, accept upgrades before they are distributed.
Simple functionality, like a push notification, could ease this process to allow a quick Yes or No response from operators.
Another potential concern is backward compatibility. What if the aggregate introduces significant breaking change? Manohar said that while this is technically possible, it’s improbable. “That would be a controversial upgrade,” he said, and validators have an incentive to keep a sturdy system intact. “They only do it if they think it’s better for the long-term health of the network.” But guardrails on this process will help avoid edge cases. Thankfully, if a change did disturb a minority of users, a blockchain can be forked. We’ve already seen this occur with Bitcoin Cash and Bitcoin, or Ethereum Classic and Ethereum, for example.
Another shift that will help enterprises embrace DevOps in their use of blockchain will be better testing and deployment processes. It’s notoriously challenging to test blockchain applications while they are tapped into the broader network. Thus, engineers could benefit from a simulated runtime wholly divorced from the main network for testing purposes.
The Future of Blockchain Development
So, what does the future of blockchain enterprise adoption look like? Well, it appears we will continue to see new novel use cases emerge that use blockchain in innovative ways. For example, Manohar pointed to the use of blockchain to power an NFT digital twin, a patent marketplace, a tagging system for supply chains and the mortgage processes for a core banking system. Within these scenarios, he noted how blockchain is exorcising cost in many ways; smart contracts are being used to avoid legal fees, eliminate manual processing and improve fault attribution.
Before blockchain can go mainstream, however, work must be done to bring other enterprises into the fold. Namely, it will necessitate more abstraction of the infrastructure layer. In this effort, low-code integration capabilities could help make API connections to ERP systems or cloud service providers more accessible.
To inspire adoption, the economy must also change its perspective on what constitutes blockchain success. As of now, common KPIs are surface-level, like: How many wallets? What is the trading volume? Instead, Manohar believes we need to focus on proving actual cost savings from blockchain adoption. Once accountants are publicly reporting revenue gains, shareholders will demand that every company do this, he said.
“Once that catalyst happens, adoption will happen very, very fast, and demand for blockchain in enterprises will be massive.” At that point, some years down the line, blockchain may truly power a new economy.