Blockchain technology is becoming more prevalent throughout the worlds of business and technology. Most people are familiar with blockchain currencies, also called cryptocurrencies, such as Bitcoin and Ethereum. However, blockchain has become much more than just a digital payment platform.
Blockchain is a distributed peer-to-peer ledger system that eliminates the need for a centralized management entity such as a bank. The system is essentially a series of data blocks that are chained together in a ledger of transactions which is open-source and distributed to millions of computers throughout the world.
This relatively new technology is transforming various industries in a variety of ways. It provides an automated process for business transactions and financial record-keeping. This amounts to a cheaper and faster solution that is very attractive for banks and businesses. As this new technology becomes more prevalent and advancements are made, many changes are coming for business and our way of life. Here are 5 predictions about the future of blockchain technology.
1. Government data distribution
Governments are likely to begin implementing distributed ledger technology (DLT) systems that will replace traditional paper-based systems. The migration to digital data systems has been going on for quite some time, but DLT has greater advantages that provide greater trust, transparency, and security via encryption and validation features.
2. Greater transparency between industries
In the near future, there is likely to be a single blockchain that is shared between various industries. Having a single system, as opposed to different ones for different companies and industries, makes it easier and more accessible to the public and provides greater transparency along with the inherent security of blockchain.
3. Government-based cryptocurrency
It is likely that governments will eventually shift from fiat currency to cryptocurrency for a number of reasons. Cryptocurrency is more traceable, has reduced settlement times and is overall more efficient. Like fiat currency, cryptocurrency can also be backed by real assets, and its price can be manipulated through various controls. This is not unlike the practice of printing more money to deflate the value of a dollar. For example, Zimbabwe has begun using Bitcoin to hedge against their national currency, and they’re planning on creating their own national digital currency.
4. Blockchain identity
Identity systems are currently flawed in a number of ways. They are insecure, operate in isolation and are prone to error. Blockchain systems can solve these problems and provide a single source to verify identity and assets. Blockchain identity can also offer a type of “self-sovereignty” that hasn’t existed before.
According to statistics, nearly 1.5 billion people throughout developing nations have inadequate means of proving their identity. An international blockchain identification platform will offer disenfranchised individuals the ability to access legal documentation and the privileges that come with that. With identifying information stored in an open-source encrypted ledger, the information will be more secure than they would be in the hands of some questionable third-world agencies.
5. World trade via blockchain
Currently, international trade is an inefficient and dysfunctional process that slows down commerce and discourages trade between nations. International trade is also fraught with fraud, counterfeiting, dirty politics, and errors. For example, tens of thousands of people are killed annually because of the sales of counterfeit drugs.
By entering cryptocurrency into the equation, many of these problems will be alleviated. By unifying methods of payment, paperwork, and regulation through a single digital international system, much of the fraud and inefficiency can be eliminated. This will create a new era for increased international commerce and foster greater trust between nations.
As blockchain technology continues to mature and advance, we are seeing more improvements in not only cryptocurrency but also in a variety of business applications such as smart contracts and automated tracking and policy enforcement. The impact of blockchain is likely to have a greater impact on business and society than most people realize.
This article was a guest post by Kevin Gardner. He graduated with a BS in Computer Science and an MBA from UCLA. He works as a business consultant where he helps companies integrate technology to improve performance. He shares his knowledge and expertise not only with his clients but with his fellow bloggers and readers.