A distributed ledger technology (DLT), blockchain has generated a lot of attention in the past few years, be it among researchers, the business world, or the government. It is a system of recording information digitally in a manner that makes it almost impossible to alter, hack, or cheat the system. A block contains the information about transactions, its participants and distinguishes them from other blocks of information with the help of an immutable cryptographic signature, known as ‘hash’. Blockchain has three primary pillars – it is decentralized, it is immutable which eliminates any chances of tampering with data, and it is transparent.
As reported by Deloitte Global Survey, more than 80% of companies in Canada, China, France, Germany, Mexico, and the UK either have blockchain projects underway or planned for the near future. According to a forecast by Gartner, by 2025 the blockchain will touch $176 billion, then surge to exceed $3.1 trillion by 2030.
The hype about blockchain revolutionizing every sector of the modern economy has been around for quite some time now. Gartner, in its Blockchain Hype Cycle report, said that about 60% of CIOs expect some adoption of blockchain in the next three years. Let’s see what the wide applications of blockchain ultimately boil down to:
Banking and Finance. With 60% of the market value concentrated in the financial sector, this industry has been the quickest in leaning towards blockchain. Today, banks operate five days a week only during business hours, making you wait if you were to make a transaction on a Friday night. Blockchain, on the contrary, never sleeps. Making a safe transfer of funds and transactions possible in a jiff regardless of day and time, blockchain integration can cultivate numerous benefits. Capgemini, a French consultancy, estimates that consumers can save up to $16 billion in banking with the assistance of blockchain applications.
Currency. Shutting down of servers, system crashes and cyberattacks can put a person’s sensitive information at risk. Bitcoin was conceived and developed out of these risks. Blockchain allows bitcoin and other cryptocurrencies to operate without a third party and is a safe way to store wealth. Additionally, it also eliminates the transaction fee. According to Statista, blockchain revenues are expected to climb to over 39 billion US dollars by 2025.
Smart Contracts. A form of computer code, a smart contract can be built onto the blockchain. It can be used to facilitate contract agreements – verification, negotiation, and fulfillment. These contracts work on a set of conditions that users agree to. Take the example of a tenant looking to lease an apartment. The smart contract would work smoothly if both parties continue to fulfill their part of the deal. However, in a case where let’s say, the landlord doesn’t supply the door code even after receiving the security deposit, it would automatically be refunded without any transaction cost deductions. After all, it’s called a ‘smart contract’ for a reason.
Supply Chain. Along with many others, Walmart, IBM, Unilever, and Siemens have already incorporated blockchain into their systems. IBM has created a Food Trust blockchain the keeps track of the journey that food products take from origin to destination. This is specifically to eliminate the chances of the food being contaminated during the journey, which can potentially put the consumer’s health at risk. In the supply chain, blockchain works as a monitoring unit that records the materials purchased, allowing companies to verify the purchase to keep authenticity intact. Forbes reports an increasing adoption of blockchain in the food industry to track the food journey.
Voting. A rather interesting use of blockchain is to facilitate the voting system to eliminate fraud, increase voter turnout, and make it impossible to tamper with the votes. Along with providing transparency, it would also provide instant results, thus improving the system on the whole.
2020 has been a year of unpredicted series of events. Coronavirus amplified trends that were already in the pipeline. This specifically includes projects that were non-experimental and had clear benefits, such as blockchain technology. According to Forrester, 2021 predictions include:
With businesses speculating about the potential capabilities of blockchain, along with being scrutinized closely for almost two decades, blockchain is finally set to step into its third decade. Bringing a wide array of practical applications, with most that have already been implemented and assessed, it is making its name globally, especially due to bitcoin and cryptocurrency. Every investor wants fewer middlemen to make the system smooth, transparent, and cheaper and blockchain has made all of that possible and more.