Blockchain Technology - Opportunities and Challenges
Blockchain technology is mostly associated with cryptocurrency, but it also brings new possibilities in many other areas. Especially for enterprises blockchain becomes more & more attractive.
In my current project, we are working on a new loyalty point system based on blockchain technology. This platform helps members redeem and settle reward points from multiple companies. The operator and partners can manage the reward program and the token budget as well as interact with their customers via the blockchain network. Blockchain was ideal mainly because of its very decentralized structure and the high security. The transparency makes it also easy for all cooperation partners to keep track of the transactions.
Nevertheless, blockchain technology also brings with it several challenges. First, the high number of users causes problems because blockchain can be very slow. The high number of transactions per second poses a challenge to the system. The poor performance has to be compensated by increased computer performance and better coding. But this entails further costs and requires a lot of experience and expertise. A further challenge is that there are no uniform standards due to the different coding languages and protocols. Moreover, there is a lack of experienced blockchain developers, which is particularly problematic for smaller companies.
This leads to the second challenge, blockchain is especially in the build-up phase, not a cheap project. You must expect a certain investment. Nevertheless, it is attractive for many companies because the decentralized system can save money in the long run.
All in all, it can be said that especially when implementing a blockchain-based system it is crucial to have experts at your side who are familiar with the matter and are able to provide a blockchain template for the corresponding requirements and enable a smooth setup. As this is still a relatively new technology, it is difficult for most companies to implement it internally. A service provider with blockchain expertise can save time by being familiar with these challenges. Especially crucial for a project of this size is the close communication between the developers and the client. The requirements must be communicated clearly from the beginning and a partner of trust helps a lot.