Blockchain technology is the single most massive disruptor (and creator) to come along since the internet itself
Blockchain technology will rebuild the internet from the ground up. It won’t do it “all at once in year or two,” but it will nevertheless. There are several reasons for this.
1. Blockchain technology is far more secure than current internet technology. In fact, if built properly, and it usually is, it is bullet proof.
2. In particular, the blockchain is capable of securely storing self-identifying data that knows who owns it. It makes it possible to for people and businesses to enforce ownership of their data.
3. In can securely share data between parties. That’s why it can create digital currencies. But this capability is also useful for sharing knowledge of transactions on any kind – such as in a supply chain.
4. Blockchain technology makes it possible, via smart contracts, for program code to enforce “trust” and thus it can in many circumstances eliminate or diminish the need for trusted third parties such a retail banks and financial brokers.
The blockchain is in its early stages – a little like the internet was in, say, 1997.
The impact so far
If you set speculative investment and crypto exchanges to one side, the major crypto application is digital currency. Bitcoin Cash, Litecoin, Ethereum, Dash, Monero and others see frequent use in person-to-person payments and to a lesser extent in digital retail. It’s low volume, but crypto transactions work very quickly, cross national boundaries and are inexpensive. That’s why, for example, the United Nations’ World Food Programme is using Ethereum blockchain payments rather than traditional banks.
Other infant areas where cryptocurrency has begun to get traction are gambling and digital games. Blockchain gambling applications can, if so designed, prove that the casino or card table is fair. For years, digital games havehad their own “internal currencies,” so adding blockchain technology to them is a natural next step.
There are also many nascent blockchain projects that don’t have currencies attached, particularly in health care and in supply chain situations. Most of them use the blockchain as a secure sharable database of transactions where transaction authenticity is guaranteed. The technology helps in supply chain management, quality assurance, accounting and international contracts – and payments.
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The impact in 2018
Most of the activities already mentioned will probably grow and prosper in 2018. Competition will doubtlessly push some cryptocurrencies into oblivion, but there will be successes too.
The most visible success so far is Ripple, which competes with SWIFT in the banking sector and has over a hundred committed banks including some big names. IBM is partnering with Stellar Lumens, a similar technology to Ripple, and has spawned many financial sector projects, including a large interbank project – the result of which may become visible this year.
There are a number of computer infrastructure coins – you can think of them as “cloud coins” – that are now operational. There’s Storj and Siacoin for data storage and Golem for sharing computer processing power. They are competing directly with Amazon, which is bold. But they are distinctly different. They intend to share the vast unused resources of PC processors and disk drives, that are underused in homes and in businesses. If there is a business in this we will probably see it emerge in 2018.
Facebook and Google, frequently accused nowadays of exploiting people’s data, have provoked a number of crypto currencies into existence – ones that aim to securely store personal data and make it available in some commercial way that benefits the user. Algebraix, Datum and Datawallet are all pushing initiatives in this area, and there are many lesser crypto players following in their wake. The expectation is that markets for personal data will emerge to the benefit of the individual.
Algebraix focuses specifically on the advertising market, with the idea that advertisers will be willing to pay viewers of their ads directly, sidestepping the likes of Google and Facebook.
There are quite a few crypto initiatives in the ad market. Another one is BAT, which stands for Basic Attention Token. It has a business model that tries to gather publishers (i.e. web sites), readers and advertisers together in a symbiotic relationship through the Brave browser. A third blockchain ad platform, Adbank, is similar to BAT, working within the triangular relationship of viewers, publishers and advertisers.
Blockchain technology is likely to have a productive impact on digital media publishing this year, in all its aspects: blogging, photographs, music, video and games. There is a plethora of coins devoted to aspects of this business area, but aside from Steem, few have separated themselves from the crowd. Businesses should expect to see some emerge this year to challenge the established players (YouTube, Netflix, Amazon, etc.)
There are many early stage health sector cryptocurrenciesincluding, oddly, Dentacoin which is devoted to dentistry and is already seeing some use. It may experience growth this year, but in my view, this whole sector is set to grow dramatically, partly because off the need to securely share information in many health sector activities and the need for the bulletproof security that the blockchain offers.
Expect it to become prominent in all areas of insurance. It has the potential to restructure the industry through decentralisation, whether it’s health insurance and big risks of the type that Lloyds of London insures.
Blockchain technology will be fundamental to innovation in all supply chain operations, particularly international ones. In manufacturing, the blockchain will complement and integrate with the the Internet of Things (IoT), in international trade it will complement and integrate with banking in new ways. However, in both areas it will take time.
Think of the early years of the internet – it is still evolving more than 20 years after its initial burst. The blockchain will be the same, eventually subsuming the internet at all levels – and making much safer.