Blockchain firms have become a popular business venture in recent years. Although the technology is still fairly new, it’s proving to be a lucrative sector to get into. However, despite its many benefits, the sector certainly has more than its fair share of challenges.
Here, we’ll look at 5 challenges blockchain firms face in the UK financial industry.
1. Security issues
One of the main benefits Blockchain initially provided was security. It was designed to be practically impossible to hack into. So, data and information were kept safe from hackers and fraudsters.
Unfortunately, changes within regulations meant that extra coding complexity was introduced, compromising the security of the technology. Companies looking to avoid these security issues will need to ensure they don’t modify or use bespoke developments which could alter the original coding.
2. High energy consumption
Another major challenge blockchain firms face is the high energy consumption blockchains take up. In a time where businesses are required to lower their energy consumption due to climate change, this can be a particularly difficult challenge to overcome.
Iceland is a key example of how problematic blockchain energy consumption can be. The country is the leading cryptocurrency server location, and its energy consumption has surpassed the amount used by private energy users. This means unless the problem is rectified, Iceland could start to see energy shortages. It’s a challenge many blockchain firms don’t even consider.
3. Regulation challenges
The regulations surrounding blockchains are forever changing. As it is a new technology, firms will find that the regulations continue to change at a rapid pace until the sector is adequately regulated.
Understanding and adopting these new regulations can be tricky. That’s where professional advice from Withers legal experts can prove invaluable.
4.Lack of public perception
One of the key tasks of any business is to find and retain a good customer or client base. However, given how new blockchains are and the lack of public perception surrounding them, it can be difficult for UK blockchain companies to gain clients. Companies need to adopt proper marketing techniques to educate the public and attract the right clientele.
5. Skills gaps
Finally, blockchain firms in the UK can also find it difficult to find the right talent for their business. There are significant skills gaps in the sector, with few knowing how to actually manage the technology. If they want to fill these gaps, they’re going to need to be willing to pay large salaries to the few who have the skillset required.
Overall, blockchain firms face a lot of challenges, both when they’re starting up and with the running of the business. The above are just 5 of the challenges companies face in the financial sector in the UK.
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