Blockchain adoption is inevitable—Barriers and risks remain

• Author: Kirk Phillips,Gregory L. Prescott,Kyleen W. Prewett
• Date: 01 April 2020
• DOI: http://doi.org/10.1002/jcaf.22415
• Published date: 01 April 2020

BLIND PEER REVIEW

Blockchain adoption is inevitable—Barriers and risks remain

Kyleen W. Prewett

1

| Gregory L. Prescott

2

| Kirk Phillips

3

1

Department of Accounting, University of

Arkansas at Little Rock, Little Rock,

Arkansas

2

Department of Accounting & Finance,

University of West Florida

3

Blockchain Catalytics, LLC, Philadelphia,

Pennsylvania

Correspondence

Gregory L. Prescott, Department of

Accounting & Finance, University of West

Florida, College of Business, 11000

University Parkway, Building 76, Office

232, Pensacola, FL 32514.

Email: gprescott@uwf.edu

Abstract

Blockchain technology possesses a vast potential to transform traditional business

models. Savvy business executives are already exploring how blockchain might

impact their industries and their competitive positions within those industries. Yet,

there are significant barriers and risks associated with blockchain technology.

In this article, we highlight some of the major obstacles and risks associated with

this transformative technology. The topics discussed here are neither definitive nor

comprehensive; however, they provide accounting and finance professionals with a

timely introduction to the barriers and perils related to blockchain technology.

Although blockchain adoption is inevitable for business enterprises, careful consider-

ation of the risks and challenges before, during, and after blockchain implementation

will help ensure long-term success.

KEYWORDS

barriers to blockchain adoption, blockchain technology, risks of blockchain adoption

Since its introduction in 2009, blockchain technology has

gained rapid and widespread interest by individuals and busi-

nesses alike. Gartner, Inc., a global research and advisory firm,

forecasts that the business value generated by blockchain will

grow rapidly, reaching $176 billion by 2025 and $3.1 trillion

by 2030 (Kandaswamy, Furlonger, & Stevens, 2018). How-

ever, reaching these numbers will require solving some of the

issues that are causing business leaders to take a “wait and see”

attitude or only cautiously test the blockchain waters. Further-

more, while the major blockchain benefits of transparency,

immutability, and autonomy are well documented in the litera-

ture, like all technologies, especially those in their infancy,

there are significant risks faced by early adopters.

This article explores major barriers to the adoption of

blockchain solutions by businesses from a variety of indus-

tries, as well as risks faced by those who implement the

technology. Our goal is to provide business executives who

might be considering blockchain technology with a primer

on some of the impediments and risks associated with

it. Although topics included in this article have some

applicability to public, permissionless blockchains associ-

ated with cryptocurrencies such as Bitcoin, the major focus

is on factors affecting companies who participate in

permissioned, consortium blockchains.

1|BARRIERS TO BLOCKCHAIN

ADOPTION

Despite the immense potential of blockchain technology,

there are also some significant barriers to its widespread

adoption. In this section, we will discuss factors that are

preventing some companies and industries from adopting

blockchain technology. Our list is by no means definitive;

instead, we try to provide the reader with a broad sense of

the obstacles that have to date prevented mass adoption of

blockchain technology.

1.1 |Scalability

In the current context, scalability refers to the ability of

blockchain's computing processes to be used in a wide range

of capabilities and to accomplish these objectives in a

Correction added on March 28, 2020, after first online publication: Article

category updated from Editorial Review to Blind Peer Review.

Received: 9 July 2019 Accepted: 28 July 2019

DOI: 10.1002/jcaf.22415

J Corp Acct Fin. 2020;31:21–28. wileyonlinelibrary.com/journal/jcaf © 2020 Wiley Periodicals, Inc. 21