Blockchain use has exploded in the last three to four years, and each business is researching distinct use cases for the technology. There are many facets of blockchain — from commercial to technological and beyond — but with the speed at which that industry is growing, it’s becoming increasingly difficult to get it right.
Why Blockchain is the Future
To comprehend the evolution of the ecosystem and the key benefits and innovations it brings, it’s best to separate the blockchain topic into two primary buckets. One is cryptocurrencies, in which we cover financial services, insurance, and capital markets, as well as private equity and venture capital agreements. Then we look at how we might use blockchain as a technology in many businesses in the enterprise world.
Blockchain in the Workplace
We released our “Time for Trust” report last year, which outlines the top five use cases for the blockchain technology: provenance, payments and financial instruments, identification, contracts and dispute resolution, and consumer interaction. These application scenarios will have a substantial impact on a country’s GDP and the global economy.
Traceability, or provenance, is the most common use case. You will need to comprehend and provide complete transparency for your customers in the future, as a result of the decentralized technological revolution and evolution. For example, if you’re purchasing a high-priced cancer medication, you’ll want to be sure it’s genuine rather than counterfeit. And it is in this area that we have a technological answer based on blockchain technology. It’s the same with expensive haute couture clothing, cars, and other items. Consumers who spend a lot of money want to know they’re getting genuine goods, which is why supply chains like this might be a game-changer for blockchain in the coming decade.
The second use is peer-to-peer trading. But how does peer-to-peer trading fit into the supply chain? It revolves around the logistics industry. Let’s say a business wishes to ship a container from Amsterdam to Australia. It must be delivered to a transport company, which will load a container onto a ship, and then it will proceed. On the other hand, there are transport providers on the other side of the transaction who do the same thing. They unpack the cargo and make sure it’s delivered to the importer on time. But what if you had access to a marketplace or platform where you could check how many ships are scheduled to sail in the next day or hour? And, if there is room available, you could place the container you wish to ship out directly, eliminating the need for a middleman. With this type of decentralized technology, this is what the future looks like.
The third — and final — bucket revolves around document sharing. How can you digitize all of your bills of lading, letters of credit, and certificates? You can accomplish it now with a cloud service, but it’s simple to hack a PDF. There have also been instances where transportation corporations have been subjected to millions or billions of dollars in fraud, requiring them to rely on paper papers since they know the paper is perfect proof and they have something real in their hands. However, with blockchain, you can add a timestamp to a document and monitor how it was created, where it came from, who opened it, who updated it, and who changed it.
You can keep track of everything, and it will save you a lot of time. There have previously been numerous commercial cases. If you merely place a bill of lading on the blockchain, for example, only one document is kept. It also saves a total of $100 each container. So compound that by the amount of containers shipped per day, and you have a billion-dollar business case. This application has a lot of possibilities. In the supply chain, we can see these three buckets.
Blockchain had a mixed reception
But now the major question is, what is the current state of affairs? There are mixed feelings regarding this topic, for several reasons. First, blockchain technology is quite difficult — it is not the internet of things. “OK, this is my device, and this is now a digital representation of it,” says IoT. This is what the Internet of Things accomplishes.”
But, what exactly does blockchain entail? Behind the scenes, there’s a lot of technology. This is why people are having trouble comprehending it — comprehending that it is similar to the internet protocol. You don’t go into great depth about what HTTP is and how it works; instead, you simply take your website and do anything you want with it. This is what we’re discussing. This is the main topic.
The second issue is a lack of knowledge and comprehension of blockchain, which has five distinct features: immutability, encryption, distribution, tokenization, and decentralization.
These are the five elements, and blockchain technology’s immutability, encryption, and dissemination have all been proven. Companies must now take a significant step toward decentralization and tokenization. Businesses must comprehend the tokenization approach and how it may be integrated into their present business model. Furthermore, businesses must fully comprehend the use of fungible, nonfungible, and security tokens.
The only advice I have for businesses is to gain more and better knowledge on this specific topic, to go into the details of how it actually relates to their business and what problems it answers, rather than merely skimming the surface of the technology.
What will happen in the future, and what will happen next year?
The first and most important aspect is interoperability. In the previous five years, the landscape has literally erupted. If you really look at how the internet has evolved, we had VPNs in the 1990s, followed by the dot-com bubble and the rise of the internet. Today, some companies still use VPNs, while others use the internet, and the difference is barely noticeable. This is how we envision private and public blockchains collaborating. As a result, there will be no debate: public blockchains will triumph over private blockchains. And while the topic of interoperability is very popular, there is still a lot of work to be done. In the upcoming five years, this is what firms and solutions will come up with.
The second question is how we interface with other technologies, as blockchain is merely a back-end technology — or, to put it another way, a technology that operates behind the scenes. That is why it is so crucial. At the same time, it’s really strategic since it affects several companies, yet it’s still a backbone technology. And don’t expect blockchain to fix all of your company’s problems just because you have it. As a result, I believe businesses must learn how to integrate it as a sort of digital transformation. What we must do now is look at how these technologies will fit into the current landscape. This is a huge, huge topic. Nothing will operate without it. It’s, without a doubt, a topic that has to be addressed.
One of my favorite futuristic subjects is the third. It’s all about governance, both blockchain and supply chain governance. This responds to that question of how we manage the ecosystem’s supply chain stakeholders. This goes hand in hand with the previous point and is something we should work on as well.
The fourth item revolves around the business model because, at the end of the day, companies forget that they need to make money as well as save money. Because they aren’t capable of doing so, blockchain solutions don’t always fly. How do we enable paperless business models, for example? And how are we going to earn money off of it? How do we split revenue with our various partners if we generate it?
These, in my opinion, are the major topics that will be critical in the growth of the blockchain ecosystem over the next upcoming five years and will aid blockchain’s advancement. This technology will gradually gain widespread adoption, and embracing it is a wise strategy that will position businesses as leaders in the digital economy and the future of business.