How Are Traditional Companies Adopting Distributed Ledger Technology Today
In 2014, two companies—PayPal and Walt Disney—were using distributed ledger and blockchain technology. As of September 2021, 81 of the world’s top 100 public companies use blockchain technology.
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Corporate interest in blockchain has been steadily climbing over the past few years, and organisations of all sizes are waking up to the idea of using blockchain to promote transparency, security and trust internally and with external partners.
How are Traditional Companies Adopting DLT
Many businesses are inclined to use permissioned blockchain networks using modular frameworks that allow them to build customised, private solutions.
This makes sense as enterprises want to anchor their network with advanced security controls and allow only specific data to be shared amongst their permissioned network of participants.
Solution-Focused DLT Applications
While the applications of DLT vary with industries and across companies, there is now a broader set of use cases. But growingly, companies are aligning their blockchain or DLT adoption strategies to a more realistic assessment of the technology’s strengths and weaknesses.
They are focusing more on pragmatic projects that solve existing pain points in business processes, don’t need large initial network participants to provide value and can deliver immediate value.
When blockchain technology is applied to solve real problems existing in an organisation, there is a higher likelihood of it getting adopted by the company.
Achieving Interoperability with Cross-Chain Technology
Many enterprises are using established blockchain networks like Corda, Hyperledger Fabric, Sawtooth, Ripple and Ethereum to create their customised solutions. But the use of so many different kinds of networks (and the way each is coded or functions) has given rise to challenges of economic and technical scaling limitations.
These blockchain networks operate on isolated ecosystems, and without an interoperability protocol, it’s not possible to work between two different networks. From a company’s perspective, there’s a lot of logistical effort and code that will go into synchronising applications across multiple networks.
The significance is that different chains that exist in isolation and cannot communicate with one another cannot take full advantage of the distributed ledger.
Interoperability is still a challenge, but cross-chain technology is emerging as the solution to enable interoperability and allow disparate networks to speak to each other. Cross-chain technology helps the transmission of value and information between different blockchain networks.
DLT in Parallel to Legacy Systems
Moving from a legacy system to adopting a disruptive technology that changes the entire culture of the company is a dramatic move — one that most enterprises have been struggling with.
At the same time, businesses have felt the need to maintain and improve their current infrastructures as they prepare to adopt new disruptive technologies.
That’s why most enterprises are starting their DLT projects in parallel to their legacy systems. Companies build the DLT infrastructure first and then collate processes from the legacy side with it.
This is especially true for regulated infrastructures where DLT technology hasn’t necessarily affected the regulation of the product itself.
Traditional businesses are beginning to see the importance of improving their systems, or they will fall short of their competitors and new market entrants. The fact that 81 out of 100 companies are leveraging DLT reflects its scope and importance.
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