Blockchain technology has evolved drastically in the last two decades. From being criticized when cryptocurrency was launched as a digital asset to becoming a major market disruptor, blockchain and related technologies are becoming an economic catalyst across the world and the evolution is staggering and inspiring.
The distributed ledger technology records and verifies transactions based on cryptography, and it has wide-reaching applications in academia, finance, international trade, insurance, government, cybersecurity, and healthcare. The ledger is secure, immutable, accurate, and updated in real-time. The most important property that makes it inherently irreplaceable to global trade and finance is that the ledger is instantly accessible online.
It has become cliché to call blockchain a revolutionary technology, especially as we live through the revolution. The speed and efficiency of transactions it offers makes it a threat and opportunity for the banking and commerce sector. Banks and financial institutions can take advantage of blockchain to improve their services. However, others can find themselves replaced by fintech firms that run on just crypto.
Investments in cryptocurrencies are skyrocketing and it is easily the most widely accepted application of blockchain technology, with innovations like cross-border payments, NFT marketplaces, and decentralised finance. Blockchain has signalled the advent of the fourth industrial revolution. The hype and hysteria around it are not dying, not anytime soon at least as it is a powerful driver of innovation and disruption of traditional business models. If organisations are able to harness the power of blockchain technology, it can advance society and communities, as no single technology has in the past. The revolution is not just financial, but social too.
Blockchain Disruptions of Modern Businesses
Blockchain made cryptocurrencies mainstream. Bitcoin and Ethereum are the early adopters of the technology but one can’t be sure who put who on the map. If we are to discuss the major applications of blockchain in 2022, cryptocurrency would be the foremost application. With more than 10,000 cryptocurrencies in existence and 50 million blockchain wallets, cryptocurrencies are slowly being accepted universally and giving a significant boost to globalization.
Other blockchain projects are concentrated in the following industry segments:
Supply Chain
Large corporations are using blockchain to track their supply chain. They are even making the data public for the sake of transparency and to gain consumer trust. IBM, Walmart, and Alibaba are pioneers in this field. The global blockchain supply chain market size will grow to USD 3,272 million by 2026.
NFTs
Non-fungible tokens (NFTs) took the internet by storm in 2021. NFT marketplace transaction volume grew to almost $41 billion in 2021. NFTs enable a novel way of creating, buying, and selling digital assets that represent real-world items. NFTs triggered a wave of digital collectibles that extend to rare artwork and prized accessories. NFTs can be bought and sold for use in games in the metaverse.
Data Management
Since blockchain is decentralised, data can be shared across organisations. The data cannot be changed, making it a single source of truth. Projects have been carried out on flight data management so that there is flight data available from airlines and airports, that all parties can have access to.
Smart Contracts
These are simple programs stored on an Ethereum blockchain that will run when certain conditions are met. These automate agreements and workflow so all parties are on the same page. Spotify is using smart contracts to manage artists on its platform. The Global Smart Contracts Market size was valued at USD 144.95 Million in 2020 and is projected to reach USD 770.52 Million by 2028.
Future Of Blockchain as It Fundamentally Transforms Businesses
Blockchain has the potential to drive change and create opportunities across multiple industries, albeit if people allow it to because it eliminates the need for a centralized management entity. Regulatory authorities and governments are working hard to control and standardise blockchain use despite the fact that blockchain offers an unmatched level of transparency.
Blockchain disruptors do not intend to make incremental changes. They change how business is being conducted at the most basic level. This is why legacy organisations are slow to adopt it, fearing drastic change because of the natural constraints of big corporations. This passes the responsibility of changes and disruptions to start-ups that have the potential for experimentation and growth. By 2026, business value added through blockchain will be in excess of $360 billion, and by 2030 it will cross $3.1 trillion.
We predict blockchain to flourish in the following fields:
Cyber Security
Quick and secure transactions have been the USP of blockchain. With most organisations suffering from data tampering, and breaches of confidential information, blockchain technology can be used to keep data secure and it lets people verify a file’s authenticity. Blockchain technology has promising applications in cybersecurity.
Digital Identity
If a user’s digital identity is based on a random but unique set of numbers on a blockchain network, it is practically impossible for hackers to steal it. British Airways is testing a block-chain powered VChain Verification system that verifies the identities of people traveling on a database held on a blockchain. Long security check queues could very well be a thing of the past.
Among the infinite applications of digital identity, the best would be voting. Blockchain will make voting faster and more secure. And it will protect voter identity, even allowing you to cast a secure and verified vote from the comfort of your homes.
Academic Validation
In the very near future blockchain technology can be used to verify university degrees. Data management can extend to universities storing their data on a blockchain that can be distributed globally.
Healthcare
Blockchain can be used to manage digital records. As it will be possible to share data securely, healthcare providers will be able to improve the speed of diagnosis while reducing redundancies. As supply chains are being monitored through blockchain, it will help improve drug safety and put a stop to counterfeit medications.
International Trade and Finance
Blockchain and cryptocurrencies are by far the most secure form of financial transactions known to mankind. This means that it would make complete sense for the financial services industry to move towards a completely digital landscape. 66% of banks will have blockchain solutions within the next three years. International commerce will flourish to foster greater trust between nations as blockchain eliminates fraud and inefficiencies.
Cryptocurrency gives businesses instant global access to capital and liquidity. Initial Coin Offerings (ICOs) will become a common way for startups to raise capital through cryptocurrency.
Navigating the Regulatory Complexities
This innovative commerce needs new playbooks. Dated rules of tax, audit, and controls do not apply anymore. Blockchain technology is creating assets and commodities. It is being used for security and inventory. It is creating wealth and distributing it. It cannot exist without the authoritative guidance of regulators.
Paired with artificial intelligence and big data, blockchain will transform the world. Every industry it touches will undergo massive change. Decentralised marketplaces will redefine business models and the relationships between businesses and consumers. Blockchain is not simply the technology of the future, as it grows and continues to mature, it is likely to have a lasting impact on life as we know it.