The Blockchain Revolution: How Is It Changing Business
If you’ve been following banking and investing in the last decade, you’ve probably heard of blockchain. By definition, it’s a growing list of records, called blocks, that are linked using cryptography. It’s a complex technology, but the idea is very simple.
Basically, it’s a distributed ledger that stores all transactions information in a transparent, yet very secure manner. Blockchain is the underlying technology that allows the existence of Bitcoin, for example.
There is probably no other technology that causes that much buzz, along with Artificial Intelligence. These disruptive technologies have become synonymous with “innovation”. In fact, according to IDC the worldwide spending on blockchain is forecasted to reach $11,7 Billion in 2022.
Looking back, history shows that the pioneers of tech have always faced difficulties and resistance to their innovations. The disinclination of industries to adopt innovative technologies is pretty normal. However, innovation brings the potential of revolutionizing not just one industry but the whole business world.
Early bitcoin failure stories promoted even more skepticism. Nevertheless, blockchain technology has now grown to be more accepted. The public perceptions of blockchain are that it’s useful only for the industry of finance. That’s not entirely true.
As Harvard Business Review calls it “it’s the first native digital medium for value, just as the internet was the first native digital medium for information. And this has big implications for business and corporations.
Blockchain Benefits
First of all, let’s have a look at why we actually call it “the blockchain revolution”. Here are some of blockchains biggest advantages:
Advanced security
There are many ways that blockchain has better security than other record-keeping systems. Transactions need approval before they are recorded. After it’s received a transaction is linked and encrypted to the previous one. That way information is spread across a computer network, instead of a single server. This makes it way more difficult for hackers to compromise the transaction data.
Any industry that needs the protection of sensitive data, like governments or financial services can benefit from blockchain as is helps to prevent unauthorized activity.
Transparency
Blockchain technology makes transaction histories transparent, as all the network participants share the same documentation as opposed to individual copies. The approval of all participants is needed, in order to update the shared version.
This makes data on blockchain way more accurate and transparent than when going through paper-heavy processes. All participants who have access are able to access data — in the case of permissioned networks.
Improved efficiency and speed
Trading whatever you think of can be a really time-consuming process when using paper-heavy procedures. Things happen and human errors are quite common, so third-party mediation is required. However, with the help of blockchain, these processes can be automated and transactions can be completed more a lot efficiently and faster.
A single digital ledger is used to perform record-keeping among all participants, so you don’t have to reconcile multiple ones and end up with less clutter. Again due to the above-mentioned transparency, the process is more trustworthy and doesn’t need intermediaries. All this makes clearing and settlement occur much quicker.
Reduces costs
Reducing costs is, of course, a priority for most businesses. Blackckain allows you to skip the need of third parties to ensure how trustworthy your trading partner is. You can just trust the data on the blockchain. Also, there is no need to review all of the documentation there usually is to complete a trade, because everyone will have access to one immutable version.
Impacts of the Blockchain on the Market
Finding access to capital is still one of the biggest challenges startup companies face. Developing a business is often very difficult and lending options are rarely available. Blockchain can serve as a great capital providing tool since cryptocurrencies are decentralized and have minimal transaction fees. This makes accepting funds from investors for instance, way easier and faster to complete. And the faster we are able to secure capital, the faster new projects start to pop up and change the ways of business.
The hype around blockchain is higher than ever before. Many even consider it as the next dot-com, which will bring a whole new era in digitalization. The excitement of industries to push blockchain business forward is huge. This supports the growth of the economy and opens a robust market for agencies that serve blockchain companies.
Just look at the blockchain technology statistics: The size of the blockchain market was $400 million in 2017; currently, it’s way over $500 million and by the year 2024 it’s expected to hit $20 billion.
According to Statista the spendings on blockchain solutions in 2019 only are $2,9 billion. Numbers say it all!
Blockchain Lays the Foundation of Digital Economy
Digital transformation manages to keep much business alive it today’s highly competitive landscape. Companies that yield to its forces can implement blockchain as an extension to their businesses. This way they’ll generate more revenue and strengthen trust with younger customers and also secure their place in the digital economy in the long-term future.
A great example of why blockchain is that efficiency is the legal sector, as an industry that is known for relying on major amounts of data in the form of paperwork. It could have enormous benefits from blockchain solutions, such as the implementation of “smart contracts”.
A smart contract can require a driver to be up-to-date on their car payments or the car won’t physically start. It can drastically reduce transaction costs and provide advanced security.
Another industry that can benefit a lot from the blockchain technology is healthcare. It can be used to secure digital assets, such as medical records. Blockchain also makes it a lot easier for patients to share records with other providers and yet maintain their control over them.
There are many more examples of blockchain technology that can be or are already used in multiple industries. This only shows how all aspects of business can find their benefits from this innovative solution.
Conclusion
The economy is constantly changing. Businesses that are open to innovation will be able to survive and build their reputation in the new digital era. The blockchain, Artificial Intelligence, digital currencies, and smart contracts are all able to take the trade and government processes to a whole new level, making them faster, safer and more efficient.
The Internet has created a highly educated generation, which has constant access to information. Gaining the trust of millennials is getting harder and harder. Many legacy industries find it difficult to differentiate themselves, based on services and pricing.
Early implementation of blockchain can be the only solution to eliminate the risk of some industries leaving the market for good. Your only way to survive in the digital world is to adopt innovations.
