Smart Contract Adoption by Enterprises About to Take Off

Enterprise adoption of smart contracts and blockchain technology is coming to a head soon, according to Chainlink CEO Sergey Nazarov and Interwork Alliance President Ron Resnick.

The pair were members of a Unitize 2020 panel earlier today and said they were optimistic that we are moving forward at an exciting rate with both enterprise adoption, and regulation and government acceptance of the technology. However they couldn’t say if 2020 will prove to be a turning point in adoption.

“Compared with a few years ago,” Nazarov stated, “there are more and more people that are ‘fast followers’ just waiting for a tech leader to make a first move.”

Hosted by Nathaniel Whittemore, the 30 minute session looked at the value propositions of blockchain as seen by enterprises and expanded on some of the major pain points that need to be addressed for large-scale adoption to occur.

It’s not without challenges

Existing systems have hundreds and thousands of people who know them and interact with them daily, and the challenge the industry faces is how to bring blockchain into the equation without creating a massive cost to retrain or redevelop these solutions and interactions.

Nazarov said the technology needs to connect with these existing enterprise solutions, with the level of technical interaction linked to the degree of adoption. 

Resnick outlined two hurdles around regulations and audits that still need to be overcome. There is currently very little trust of the technology by regulators and regulations vary from country to country. Many enterprises are waiting for more clarity before adopting a blockchain solution, he added. Add to this the cost of audits and the heavy paper trails that will still exist for many enterprises, there are some major challenges before many benefits can be realistically achieved.

A shift is happening

For blockchain to be taken as a serious solution the panelists agreed that mass adoption needs the integration of both public and private blockchains into a shared and interoperable data infrastructure. 

Resnick said we are already seeing people looking for new ways to interact with each other in relation to data and there has been a major shift in how governments, enterprises and everyone else shares their data.

“It’s all about a shared data infrastructure,” he said.  

This isn’t to say there will only be one blockchain, Nazarov went on to explain. Enterprise solutions are currently focused on privacy and compliance with regulations, while individual users are focused on decentralization and security. He said we’ll see each of these solutions shift to some middle ground that addresses the needs of both scenarios.

What do enterprises need from blockchain?

Nazarov and Resnick agreed enterprises have three major requirements for blockchain solutions: speeding up transactions and reducing latency, protecting transaction data, and improved security and scalability through decentralization.

Nazarov suggested that companies won’t need to run their whole systems on blockchain to take advantage of the technology’s benefits. They simply need an oracle or connection to one in order to process their transactions on-chain.