An increasing number of businesses have shown an interest in entering the blockchain space. However, after focusing for several years on the advantages of blockchain in terms of speed, cost, streamlined processes, and greater efficiency, their focus has shifted to the many difficulties and bottlenecks impeding comprehensive implementation. 

1. Blockchain has an Image Problem!

Blockchain has an issue with its image. In the minds of many, blockchain is too closely associated with cryptocurrency. Crypto, in particular, has a bad reputation because it is associated with fraudsters and hackers who use the technology for illegal purposes. This negative rep reflects poorly on the blockchain technology system as a whole, making individuals reconsider their decision to use it.

2. Blockchain has a Disruptive Nature!

Organizations are opposed to the concept of blockchain and its disruptive nature. For some, the prospect of losing market share or perhaps becoming obsolete is a nightmare. About 80% of the time, blockchain is used to modify business processes, and 20% of the time, it is used to deploy the technology. It marks a complete change away from old methods of operation. This is true even in areas where digital technology has already had a substantial impact.

3. Blockchain is still an Immature Technology!

Aside from the issues mentioned above, blockchain confronts a slew of implementation issues, many of which stem from the fact that the technology is still in its infancy. These issues include lack of scalability, lack of standardization: limited interoperability, integration with legacy systems, and lack of blockchain developers.

Blockchain can sometimes be cumbersome and slow too. Transitions take longer to complete as the number of users on the network grows. The entire transaction might take hours or even days to complete. As a result, transaction costs are higher than usual, limiting the number of network users.

4. Organizational Challenges!

Furthermore, significant organizational difficulties are inhibiting business adoption of blockchain technology.

• Lack of awareness and understanding
• Productivity paradox
• Lack of cooperation
• Security and privacy challenges
• Lack of regulatory clarity and good governance

They can be significantly less robust to shocks that might directly affect participants. As a result, there is a compelling case for blockchain applications to operate within existing regulatory frameworks rather than outside of them. To overcome these obstacles, the government and other tightly regulated industries may need to enact blockchain rules. However, this implies that regulators in all industries must be aware of technology and its implications for firms and consumers.

Conclusion!

In general, technical innovations require a long time to mature and reach a stable commercialization state. Blockchain, like any other technological innovation, will see a sluggish adoption rate in the following years. Even if there are several options, it will take time to overcome all the obstacles and utilize all the advantages.

The list mentioned above of Blockchain adoption obstacles emphasizes the necessity for technological advancements. And the industry is working hard to solve these. Things will undoubtedly become more pleasant and trigger broad adoption if we address these and remove the different obstacles. 

For more information about Worthpad and how to be a part of the revolution that will shape the global crypto space, visit the Worthpad website.

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By definition, accounting practice involves the process of reporting the daily financial activity of a business entity. It is necessary for producing the required annual financial statements of a company. There are different accounting methods that businesses can use to record their financial statements.

Every country has their own accounting principles that companies must adhere to. In the US, the generally accepted accounting principles (GAAP) is issued by the FASB. It consists of accounting principles, procedures, and standards that companies must follow to prepare their financial statements.

There are two prominent accounting methods used by CPAs for their accounting practices. They are cash accounting and accrual accounting.

1. Cash Accounting

In this method of accounting, revenue and expenses are recorded only when they are received and paid. That is, a sale is only recorded when payment is received, and expenses are captured when bills are paid. Cash accounting method is the most used for small businesses.

2. Accrual Accounting

Under the accrual accounting, revenue and expenses are recorded once they are earned or consumed. You don’t have to wait until a payment is received or a bill is paid. It is mostly used by public organizations that want its financial statement audited.

Accrual accounting is considered by many to be the most theoretically correct accounting method. It requires an advanced knowledge of accounting.

Now, what’s the difference between these two accounting methods?

The main difference between cash accounting and accrual accounting is the time when revenue and expenses are recorded or captured. While accrual accounting focuses on anticipated revenue and expenses, cash accounting only recognises what’s on ground. None of these two methods of accounting truly shows the financial health of an organization. And both have their advantages and disadvantages.

The reason why the accrual method is considered the most theoretically correct is because it shows the overall earnings of a company. It levels out all revenue and expenses as they are generated.

Here are the advantages and disadvantages of both cash and accrual accounting methods.

Cash Accounting Methods

Advantages

It is simple to use and only account for cash paid or received

It doesn’t require greater knowledge of accounting

With cash accounting it is easier to track the cash flow of an organization.

Disadvantages

It doesn’t reflect the true financial health of an organization.

When a company is cash-rich, investors might assume the company is making profit while in reality it is making a loss due to large sums of account payables.

Accrual Accounting Method

Advantages

It shows a more accurate picture of the financial health of an organisation.

It shows the long-term profitability of a company

It includes both accounts payable and receivables

Disadvantages

It doesn’t track cash flow. And as a result, it doesn’t account for an organisation’s cash shortage in the short term.

It requires a greater knowledge of accounting

It is sometimes more complex to implement since it has to account for both unearned revenue and yet-to-be-paid expenses.