What and why slows down the development of blockchain projects?

This article was published in 2022, which means that 40 years have passed since the idea of ​​blockchain appeared. In fact, it is a lot and other technologies gained popularity, recognition and widespread use in less time. The key event that made blockchain widely known and controversial at the same time happened 14 years ago — in 2008, Bitcoin started working. Unfortunately, since that time, for many people, the name of cryptocurrency and the name of the technology on which it works have become identical, although in fact they are completely different concepts. And you should understand this if you want to build a successful blockchain business, and not be among the technological outsiders of the 21st century.

Blockchain ≠ Bitcoin

Surely you know examples of successful people who have made millions and even billions from Bitcoin coins. But at the same time, you could not help but hear about those who lost almost as much on crypto exchanges, were unable to return the funds invested in mining forms or became victims of hackers. There are more such people than successful ones. And that is why for many people who associate blockchain technology with Bitcoin itself, it seems dangerous and almost harmful. This is something too complicated, there are a lot of hackers here who are only hunting for personal data, and in general, it all looks like another financial pyramid.

Indeed, news about negative phenomena, where the word "blockchain" appears, causes people to be wary. But it should be understood that cryptocurrencies, such as Bitcoin, are only one of the areas that use the technology of decentralized networks. That is why there is nothing in common in the risks with Bitcoin and the use of the blockchain. Reputational problems of technology are purely imaginary due to the fact that people misunderstand various concepts and do not understand the situation.

Likewise with other blockchain projects, including many failed ICOs that caused losses to their owners. But in such cases, claims should be made not to the technology, but to the startups themselves. And since they suffered a fiasco, it is not that the blockchain is bad, but, rather, the authors of the projects did not take something into account. The best analogy is with ordinary business: no one blames a market economy for the bankruptcy of, say, a beauty salon or a fast food restaurant.

Against are centralized systems

In addition to imaginary adversaries such as ignorance, blockchain technology also has very real ones, namely the institutions that it is supposed to put out of work and income. The very idea of ​​a decentralized network contradicts their ideology — to keep all possible processes under control in some clear place. For example, this is a typical commercial bank that has a headquarters and an extensive network of branches, representative offices and various equipment. All profits from activities flow to the center of such an institution. Support of the periphery requires significant funds in the form of wages, rent, taxes, etc. Therefore, each bank is interested in expanding the boundaries of its influence, which causes an increase in profit. That is why a decentralized system that does not require employees or premises is the most dangerous competitor, capable of depriving a commercial bank of absolutely everything.

It is no secret that the governments of countries are partially or completely under the influence of banks and other financial structures. In this case, we have a situation where some blockchain applications run counter to the state interest. A typical example is the same Bitcoin, which, despite its crazy capitalization and worldwide fame, is still not recognized by some countries at the official level. In November 2021, the capitalization of the coin reached 3 trillion. dollars, which no longer allows even the governments of powerful countries to simply ignore this phenomenon.

By the end of 2022, experts predict the legalization of Bitcoin in many countries marked in the image. But so far, the negative attitude of the state authorities to the phenomenon that exists thanks to blockchain technology casts a shadow over the technology itself. But even without cryptocurrency, other projects may cause government opposition due to the high level of confidentiality. Any political power goes berserk when it cannot control its own citizens, and it is blockchain that gives users the greatest freedom and anonymity.

Human factor

"What is the human factor?" someone may ask. "The system works automatically!" That's right, we have absolutely no complaints about blockchain. But it's coded by regular people, so it's vulnerable for a number of reasons.

First, there are still few narrow-profile specialists in the world who can serve the blockchain at the proper level. A developer should gain a lot of experience, mostly in other areas, before taking on blockchain. That is why there is not enough experienced developers for everyone.

Secondly, in the conditions of low awareness of people about blockchain, there are really quite a lot of too good specialists who go to the dark side of the force. The price is justified, because there is really a lot of money circulating in the blockchain, which you can try to appropriate. That is why various hacker attacks arise, dishonest ICOs and other projects are launched, which are actually traps for frivolous users. All this also spoils the reputation of the blockchain, but it should be understood: hackers do not hack the blockchain itself, but the smart contracts that work on it, or they are looking for opportunities to learn the personal data of users. The technology itself works harmoniously all the time.

And thirdly, people do not communicate enough with each other for the development of technology. Most of those who know well about blockchain are trying to create their own projects and earn money, which means they are in no hurry to share their knowledge with others because of the great competition. Therefore, there is no discussion and it is impossible to foresee many difficulties. That is why many startups die, the authors of which acted at their own discretion instead of consulting with others.

Promising directions of blockchain

Almost every day, a new cryptocurrency is launched in the world, but at the same time they hide 1-2 unsuccessful ones. Regarding the financial sector, everything is clear - blockchain has broad prospects here, which will continue to develop. But this is far from the only and not the best application for blockchain technology, which allows you to:

• Conduct elections or polls — the results cannot be falsified;

• Automate routine interaction with thousands of counterparties at once;

• Confirm copyright and ownership;

• Organize the educational system;

• Store and distribute virtually any information;

• Grant citizenship or collect taxes and much more.

In this article, we tried to show how humanity itself is inhibiting the development of the blockchain system. But we never once said that it should not be done. On the contrary: right now is the time to lay the foundation for a promising blockchain business for many years to come. Avivi specialists are able to develop various solutions of smart contracts, decentralized applications and everything you may need on the way to development. Let's start today and contribute to the development of useful technology like blockchain!