Today, around 80% of banks are developing their own blockchain technology.
In September 2016, Barclays carried out the world’s first trade transaction using blockchain. They cut a process that normally takes 7–10 days down to less than four hours.
IBM is working with the government of Dubai to develop smart contracts that can facilitate all trade that passes through its port. This is huge, given $344 billion worth of goods passed through the port in 2016. Dubai’s government said it plans to shift all transactions to blockchain by 2020.
The real value of blockchain is that it renders intermediaries obsolete. They make a living off being a third party that establishes “trust” between parties unknown to each other. Blockchain replaces these middlemen.
This is the reason the world’s biggest firms are investing in blockchain. They are trying to become the disruptor, not the disrupted.
Blockchain is a foundational technology like the Internet—a big system on top of which you can build applications.
To give you a better sense of the thing, here’s just a smattering of existing businesses that could find themselves on the wrong side of the proverbial ledger.
What Industries Could Blockchain Disrupt?
Banks are essentially secure storehouses and transfer hubs for money.
Blockchain’s secure, decentralized, and tamper-proof ledger addresses this function—at a fraction of the cost. A company called Thought Machine has already created a “blockchain bank.”
Clearinghouses and stock brokers are also in the firing line, for the same reason.
In future elections, votes could be cast through a blockchain. Blockchain’s audit trail would authenticate voters’ identity and keep track of votes while allowing anyone to verify no votes were altered.
This would make fraud virtually impossible and ensure there is no question of electoral foul play.
Music streaming is great—well, maybe not for the musicians. It’s estimated that artists lose up to 86% of the proceeds from their music because of illegal downloading. Blockchain is making it possible for artists to earn royalties on their music without going through a record label.
Grammy-winning artist Imogen Heap has created a blockchain-based streaming platform called MYCELIA that is facilitating this.
When most people think of buying and selling property, they think copious amounts of paperwork, a long, drawn-out process, and high agent fees.
Using blockchain, anyone can manage, track, and transfer land titles and property deeds—no need for intermediaries. A firm called Ubitquity is providing this service right now.
Supply Chain Management
The transfer of goods requires a lot of middlemen. Middlemen take time, add costs, and every now and then, make mistakes. The creation of smart contracts means there is little need for these intermediaries.
Smart contracts basically function as a traceability system—recording, managing, and enforcing contracts in a secure and transparent manner. UK company Provenance, which facilitates “transparent and traceable” trade, has been one of the most successful blockchain-based companies so far.
The Next Tech Disruption Is Closer Than We Think
These uses are just scratching the surface of the many areas in which blockchain technology will upset apple carts.
With the world’s most successful companies pouring millions into blockchain, big breakthroughs are likely near. While it took more than 30 years for the Internet to transform the economy, today more than 50% of the world’s most valuable firms are Internet-driven.
Given the fast pace of technology, a blockchain-based economy could be closer than we think.