Cryptocurrency news has mostly been a cause for concern to investors. These are not just those who would have been interested in investments in digital currencies but entities that would have loved to adopt blockchain.
Blockchain can rightly be described as the parent technology of digital currencies, but its over-hyped child has mostly been in the news for bad reasons causing disenchantment and concern to businesses considering adopting the technology.
According to Deloitte Consulting Linda Pawczuk, companies that would make use of blockchain technology have mostly expressed skepticism at the sort of news associated with the industry.
These are issues like hacks, frauds and other criminal activities which have kept policy makers and regulators on their feet at how to tackle without effectively extirpating the potential promise of the industry.
Cryptocurrencies Have Been Bad News for Blockchain
It appears that the association of cryptocurrencies with the blockchain technology is hampering the inclination of businesses to embrace it. Pawczuk said,
“The boards are asking us about it because it’s in the news for bad actors, and boards are nervous that blockchain is affiliated with bitcoin and altcoins and ICOs, and what do boards do to protect their investors? So it hasn’t helped us, the association with the bad actors.”
Pawczuk stated it has been a challenge convincing large corporations that the distributed ledger technology is actually a safe alternative to their paperwork with all the negative news flying around, especially with regard to initial coin offering which she said is considered a donor market.
In essence, in the blockchain marketing circles such as she is involves with, the belief is that investors in ICOs would not get back their money or the expected profit.
This trend is compounded by the fact that a good percentage of initial coin offerings have been declared scams by ICO advisory service Satis Group LLC .
According to an April 8 publication regarding the industry,
“The study results reveal that of the whole pie, a whopping 81 percent of the ICOs turned out to be scams. Another 6 percent fell into the Failed category, and 5 percent had Gone Dead, taking the total for “Failure to List” group to 92 percent”
Reports such as this is what companies look at when they are advised on the blockchain option for business.
Pawczuk likened the situation to having a bad brother whose reputation affects whatever you do even when you have the best of intentions.
“Unfortunately we got those things that create angst,” Pawczuk said.
“I’m invited to the meetings all the time, and I have to explain why they shouldn’t be concerned about the security of information [on a blockchain], explain what is the perspective on bitcoin and the 2,000 altcoins — and we’re explaining this, but we’re like, ‘Can we stop talking about my bad brother? Can we start talking about my brother who is the Olympic champion?’”
The Olympic Champion
Blockchain according to her is the Olympic champion. This is the reason the firm is working on getting corporations to overlook the negative publicity created by digital currencies and initial coin offering and sees the prospects in its adoption.
Pawczuk said that their emphasis is on getting established corporations and companies some of which have been in operation for centuries but have the reputation of being innovation-friendly to see the future in blockchain.
These companies were described as, “have been existing for hundreds of years, some of them, but grew up in traditional process models and decided to migrate to more distributed technologies.”
Depending On Neutral Parties
To accomplish this, Deloitte blockchain service is relying on partnering with consortium made up of companies that were not set up specifically to develop and promote the distributed ledger technology such as Hyperledger.
The perception is that these are neutral parties that could be relied on to make impassioned presentations. She already has an example with The Institutes RickBlock Alliance which she oversaw in her previous job leading Deloitte’s blockchain drive in the insurance sector for 3 years.
Another challenge the blockchain adoption market faces according to Pawczuk is vendors building free proof of concept.
“The more interesting story here isn’t the technology, it’s business model disruption and how do we look differently at paradigms,” she said. “So we get a little bit queasy when we hear about all these free proofs of concept that’s being built, because it’s the technology being applied to the solution.”
Even with the negative publicity, there is no doubt that many decision-makers are coming to grasp the import of embracing the technology especially among some government policy makers.
Importance of Standardization
Companies are a different ball game in that these are mainly risk averse in their approach in the bid to protect shareholders.
A Deloitte report release in October said,
“Standardization could help enterprises collaborate on application development, validate proofs of concept, and share blockchain solutions as well as making it easier to integrate with existing systems.”
These and issues like interoperability are issues that need settled. Also even though cryptocurrencies and the bad publicity they receive most times cannot be dissociated with blockchain, the need to educate top management of the integrity and prospects of the technology is obvious.