When looking at the inroads to industries that blockchain has made over the last several years, one area that does not get a lot of attention is the underlying technology foundations that make blockchain possible. You can get deep down into the most technical of underpinnings – things like differences among the consensus algorithms used to generate the next token (you might hear debates about proof of work vs. proof of stake). And there is a lot of work (and debate) going on about alternatives to consensus algorithms that are focused on parts of the blockchain other than the token. If you want to dive into that world, this article on proof of selection is a good example of the kinds of discussions going on.
When it comes to retail, those details don’t matter. It’s fair to say that most retailers are not going to care about the philosophical debates around how tokens are generated or how new blocks are added to the blockchain – they just want to know that it does what it’s supposed to do, and that this “something” is better than they have today. The barriers to blockchain adoption in retail might depend in part on answering these deep philosophical questions, but what really matters to retailers are three simple things: Performance, Privacy, and Ease of Use.
How each of these is achieved isn’t going to matter for industry adoption – but having each of these matters very much. And right now, blockchain has not fully delivered. Let’s take a look at why, and what remains to be done.
In blockchain, performance really comes down to scalability – the ability to handle a lot of transactions (defined as adding a new block to the blockchain) all at once. There are two places where this is critically important in retail: in payments, and in programmatic advertising.