This is highly dependent on what application scenario you are talking about. If I am a company, and I am, say, looking to keep an audit trail of all the people who entered a secure part of my building, let’s say. There should be no real costs apart from software development for shifting an existing system to a blockchain system. But it is highly dependent on who is using the blockchain. You always have to keep in mind who is using the data that is being stored.
The one thing that blockchains are not very good at is private information. Because, inherently, it is being shared amongst all the users, and if you want to do something that requires secrecy then that’s gonna require some fancy cryptography and key management. Let’s say if only the manager should be allowed to see this, but not the subordinates, then blockchain does not really lend itself naturally to that situation. We can use some cryptographic magic there and make it work, but it’s not the most natural way of doing things. So things where information needs to be publicly available, needs to be redundant and securely stored, blockchains are easy to adapt to, but if you need some sort of privacy, if you need very fast throughut (measured in transactions per second), if you need very low latency, then blockchain probably isn’t the best way to go.
Yes and no. Much of the technology is open source, and there are good resources readily available for quick studies. I know programmers who have taught themselves what they needed and had a working prototype application spun up within a couple weeks.
However, we are hearing about challenges around finding blockchain programming talent, particularly if you are looking to do something more sophisticated. For example, given the ICO boom, enterprise interest in Ethereum, etc., there is significant demand right now for people who can program in Solidity, a custom programming language for Ethereum. Not very many coders can write in that language. Many are learning, but we are still talking about hundreds of people, maybe a few thousand who have any significant experience, so it’s a pretty scarce resource base. And you would have to pay a premium if you can find someone. So human capital is a key blockchain challenge.
There is also an educational challenge, which is maybe as big a deal. Educating your organisation through all levels about what blockhchain is and what problems it solves, why it would be interesting to you or not - that is a huge issue. This is a big task for people in education, and we’re seeing a lot of demand additional blockchain education programs.
There are also legal and regulatory issues. Our research shows that legal uncertainty and regulatory uncertainty are the major barriers to wider adoption of blockahin technology. Smart contracts for example (a kind of electronic contract embodied in code and performed automatically by computers), considered a ‘killer app’ for blockchain technology, are often not being implemented strictly in code today. There often is a link between the software smart contract and an actual legal contract. So there is a cost there. Lawyers are not cheap; to be a blockchain lawyer is a good career track right now.
You can see there are lots of different costs. At first, it may seem you can play with this tech and it is cheap to test, but then you start running into all these costs when you want to go beyond a test environment.
Garrick Hileman and Michel Rauchs released the 2017 Global Blockchain Benchmarking Study, which can be downloaded as a PDF here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3040224.
You can read the brief summary of their study here: https://insight.jbs.cam.ac.uk/2017/central-banks-are-trialling-blockchain/
The above interview was conducted on 12 December, 2017.