The power of blockchain and how it’s only just getting started
Since the launch of Bitcoin, back in 2009, we have had proof that blockchain has the power to significantly impact a number of industries. It showed that a digital distributed ledger works in practice, not just in theory. Since then, businesses all over the world have been exploring how blockchain can work for them.
Savvy investors have quickly become involved with companies that are exploring blockchain technology. They have seen the impact that’s already been had, and they’ve been given a glimpse of what’s to come. Here, we’re going to explore the benefits that blockchain has already brought about. We’re then going to consider what we can expect from 2022 and beyond.
The benefits of blockchain
The reason that investors are supporting blockchain companies at such a high level is that the technology is already having an impact. The benefits that blockchain has brought already include:
A decentralised structure
This is what, in part, enables the creation of trust in the first place. Where there is a lack of trust, as there hasn’t been the opportunity to build it as yet, blockchain allows for the sharing of data within an ecosystem of businesses. Within this ecosystem, there is no single person or any other entity that is in charge.
One of the best examples of how this benefits businesses can be seen when looking at the supply chain. Here, there are numerous businesses involved and they all have a need for information. Where there is no one to facilitate the sharing of information, blockchain solves the problem.
Transact with trust
Blockchain allows for trust between different entities. Meaning counterparties cooperate with each other without having to trust each other or using an escrow.
Trust is often cited as one of the major benefits offered by blockchain. Early transactions with Bitcoin proved how blockchain could develop trust between parties who know nothing about each other.
Highest levels of security and privacy
The levels of security offered by blockchain technology is unrivalled, as records are necessarily encrypted on a blockchain. With blockchain, there is the creation of an unalterable record of transactions. Something else that adds to security here is that data that is stored on a blockchain is actually stored across a whole network of computers. This means that hacking is all but impossible. This is in stark contracts to traditional computer systems where data is stored on servers.
With an increase in efficiency and a reduction in manual tasks, such as aggregating and amending data, blockchain has the ability to cut costs for organisations. Perhaps some of the biggest savings come from the fact that transfers can be made all without the involvement of a middle man. This brings a substantial saving in fees.
There are numerous ways in which blockchain has allowed businesses to get things done much quicker. The most basic example can be seen when looking at transferring funds from one country to another. Often this would take days for traditional banks to process and it could be as many as 5 days before funds settle in an account. With blockchain, this can be done in seconds. Worst case scenario, it may take an hour but that’s a huge improvement on 5 days.
Walmart has undoubtedly benefited from the speed that blockchain offers, integrating this technology through elements of their supply chain.
Should there be an issue with one particular producer, blockchain can be used to quickly identify all of the affected products and remove them from sale. Unaffected goods are equally easily identified and left on display.
All that this basically means is that once a transaction has been recorded on a blockchain, there is no way of changing or deleting it. Every transaction is time and date stamped and this leaves a permanent record. This makes blockchain a great tool for carrying out audits and any other process where there is a need to track things over time.
Control over your own data
The level of control that you are given over your individual data can not be matched anywhere else. We all know that data is an extremely valuable commodity and so being able to control this is a must. With blockchain, you decide what you want to share. You decide who you want to share it with and, by utilising smart contracts, you even get to decide how long you want to share it for.
This process sees the value of an asset being converted into a digital token before being shared via a blockchain. This is an area that has exploded in popularity when you look at the artwork being produced as non-fungible tokens (NFTs). However, tokenisation also has the potential for broader applications that could be used to smooth business transactions.
One of the main reasons that investors get excited about blockchain is that it is an innovative technology. It is being explored as a way to assist in the recruitment process. There is talk of university degrees being shared on the blockchain so that hiring managers can easily access them. There is talk of storing a whole host of data which means that hiring managers don’t need to spend the time verifying every piece of information – blockchain will do it for them.
Industries that are already benefiting from blockchain
The impressive thing about blockchain is that it has the potential to bring benefits to an array of sectors. Of course, there are some sectors that are more suited than others, but here’s a look at just three that are already reaping the benefits of blockchain technology:
The benefits here are to the institutions themselves as well as their customers. What blockchain brings here is faster payments and ones with hugely reduced fees.
Blockchain has proven to be the ideal tool to ensure that patient details are stored securely. It also allows patients to have control over exactly what data they share.
Government agencies and non-profit
Here, smart contracts have been utilised. These allow for the creation of immutable records that also enforce stipulated terms.
A look at 2022 and beyond
While blockchain is already having a real impact, this is a technology that is constantly evolving and one that sees new practical applications emerging. Here’s a look at what we’re likely to see over the short term:
Assisting developing countries
El Salvador became the first country to adopt Bitcoin as legal tender. This has opened up the opportunity for other countries to follow suit. When you consider developing countries, there are billions of people who are classed as unbanked and blocked out of the financial systems. Blockchain has the power to address this and to provide something free from corruption and protected from wild swings in inflation.
The last year or two have thrown our need for vaccines into the spotlight. Covid-19 literally changed the world and demonstrated just how important vaccines are. However, this brought its own challenges with the production of fake vaccines. Blockchain is likely to provide the solution here as it provides the most reliable way of tracking deliveries from source to use.
The Metaverse is to become a reality and it is set to be huge. The thing is, it needs blockchain to be successful. Blockchain allows for decentralisation as well as ensuring user governance privileges and verifiable provenance. With the Metaverse attracting more and more attention, the need for blockchain, and a reliance upon it, will only continue to grow.
There is no doubt that blockchain is the most advanced form of technology to exist. What makes it so exciting is the fact that we are only just getting started. This is a technology that is constantly evolving and there is little doubt that there is so much more to come.
Now is the time to get on board with blockchain companies and be part of something very special and something that has the potential to be extremely financially rewarding.