Any discussion of blockchain technology is a breeding ground for various degrees of hype. How could it be otherwise? Blockchain has been anointed as the messiah, not just for the finance industry but for just about every industry that involves even the slightest smidgen of technology.
However, like the messiahs of antiquity, blockchain as the Redeemer of all industries is still a long way off. That’s why so many blockchain-related press releases are contingent upon speculation, planning, and experimentation.
Nevertheless, unlike Star Trek’s warp drive or transporter, blockchain is more than just a remote theoretical possibility. Witness bitcoin, which has spawned a plethora of bitcoin wallet and security companies, and even online memorabilia stores. Whether or not bitcoin has peaked, in 2016 bitcoin’s blockchain was hard at work documenting the the currency’s daily average of 203,267 transactions.
So what are the challenges of being a company that works with blockchain in a world in which blockchain has yet to come into its own? Obviously, blockchain regulation – or lack thereof – has a major impact on how blockchain companies operate, especially for companies that want to go global.
“The cultural side of [globalization] is always interesting, but I think the bigger challenge is understanding the unique needs of the people and the regulatory requirements of every place we go to,” said David Sherman, head of marketing at Colu. The Israeli startup develops blockchain-based local currencies, which are a means of encouraging local spending, connectivity, and activism. Sherman cited opposing U.S. court rulings on whether bitcoin is a currency or property as an example of how countries aren’t exactly on top of their blockchain regulation game.
Integration between blockchain and non-blockchain systems is also something that is becoming pressing for the company. With more and more SMB owners looking for a holisitic, easy way to manage all of their money concerns, making sure that Colu’s digital cash system can be integrated with accounting tech is vital. As a 2016 Oliver Wyman report on blockchain in capital markets notes, integration with existing non-blockchain systems will continue to be a requirement for the foreseeable future – if blockchain companies want to stay in business.
In spite of bitcoin hacks and the never-ending parade of ethereum attacks, Colu doesn’t think blockchain security breaches are anything to be worried about. “We’re not concerned,” said Sherman. With Ethereum, “a contract was created badly which created a vulnerability. The technology itself is super secure.”