Blockchain for Enterprises. Three Ways to Advance Crypto in Big Businesses
15.12.2022 | 5 min read
It's true that decentralized markets have slowed in the past year, but the underlying framework for blockchain-based apps has been rapidly improving. According to Blockdata, 44 out of the top 100 public companies across six major sectors are using blockchain in some form already, ranging from retailers like McDonalds and Walmart, to large financial institutions, including Bank of America. But what can be done to lure more big guns to the crypto world?
Our Co-Founder, Head of Delivery and crypto enthusiast, Michał Kłujszo, was recently interviewed on the Podróż Po Web 3 (Journeys Through Web 3) podcast. There, he said that he believes more widespread enterprise adoption of crypto will be down to three key elements: “a further decrease in transaction costs, improved UX of top crypto products and better regulation - less of this ‘wild, wild west’ situation.” Let’s explore each of these points in more detail.
The more widespread enterprise adoption of crypto will be down to three key elements: “a further decrease in transaction costs, improved UX of top crypto products and better regulation - less of this ‘wild, wild west’ situation.”
Lower transaction costs can boost usage
Transaction fees have always been a barrier to entry for crypto, and there is already significant data to show that high fees are stopping newcomers from joining.
In May of this year, some transactions on Ethereum reached a staggering $196.63. The problem is that high fees go against the true spirit of decentralization - miners prioritize transactions with the highest fees when demand rises. Increased fees alienate a huge portion of individuals, who are simply unable to pay them. But they also make enterprises think twice about whether it's worth entering the space.
Crypto top dogs are aware of this, and there is some work already underway to bring costs down. The solutions that have come to the fore include rollups, which work by bundling transactions and processing them outside of the layer 1 network. Sharding, which ensures that each transaction uses less space, is increasingly used. There are also some emerging trading platforms which facilitate zero fee transfers, but these are still few and far between.
The perfect marriage of UX and crypto
Our Co-Founder Michał, believes that ‘great user experience (UX) is the key to broader adoption of all blockchain products by enterprises, be it DeFi, NFTs or anything else.’ Although general understanding of crypto is growing, the right UX can play a key role in convincing senior decision makers to adopt crypto products. Three key elements of great UX for DeFi products are:
1. Effective UX writing
Blockchain is an industry with a lot of jargon, which is why it often appears impenetrable to outsiders. Here’s where UX writers have a chance to directly impact take-up rates, by using language that is accessible to the average business leader who may not have in-depth knowledge of crypto. The focus needs to be on user needs, rather than the technology being used. For example, instead of talking about ‘signed transitions,’ it’s better for users to simply be aware that their payment will be secure.
2. Smooth onboarding
Lengthy onboarding processes can deter even the most patient of users, and enterprise decision makers are notoriously time-poor. This is why crypto products with fewer sign-up steps are likely to appeal to more users. Each step needs to be clearly outlined and if problems arise, they must be explained and addressed (rather than presenting an error message).
3. Decent transaction speed
Although blockchain tech is constantly evolving, there are still reports of sluggish transaction speeds - usually nowhere near those of traditional financial institutions. That’s why UX must address the waiting element by clearly showing users how long a given process will take, using countdown timers and reassuring them that everything is working as it should. Enterprise product owners should also note that there are burgeoning blockchains which can generate much faster speeds, such as Solana, Fantom and Cardano.
For more detail about the importance of UX in blockchain products, take a look at our blog post on the subject.
‘Hasta luego’ to the ‘wild, wild west’ of blockchain legislation
Regulatory complexity continues to be an important barrier for blockchain adoption. Over the past couple of years, both local and national governments have expressed an interest in regulating the crypto market, but often got bogged down in the complexities of the ecosystem. Most have now issued some guidelines related to crypto, usually based around existing broader financial regulations within a given country.
Nations’ approaches to crypto legislation vary widely. Some have gone as far as recognizing crypto trading as a legal activity. Others have allowed crypto platforms to operate license-free but have not offered a universal blueprint for regulators.
Oliver Linch, CEO of Bittrex Global is a major advocate for improved regulation. He says, “Clear laws will increase the adoption of crypto, as aspiring adopters will feel safer investing their money into regulated institutions.”
Some crypto enthusiasts believe that regulatory change needs to come from centralized exchanges first, before the rest of the ecosystem can follow. This is because they can pave the way for enterprise users to enter the crypto space in a safe way. Linch gave the examples of Bermuda and Liechtenstein - territories in which positive regulations have been put in place by centralized crypto exchanges working together with local policymakers.
What does the future hold for enterprise crypto?
There’s no doubt that 2023 will see further growth in blockchain adoption across the board from enterprises in all sectors. Business leaders can see the many benefits that blockchain can bring - from speeding up the deployment of new products to increasing transparency throughout entire supply chain networks. The scope of what else can be achieved with it is immense. And if we see lower transaction costs, improved UX and new legislation, the take-up rates are likely to be exponential in the coming years.