This technology is not only of particular interest to financial services companies. Its reach can also transform commerce, supply chain, and logistics.
Blockchain was one of the most talked-about technology trends in recent years. The simplest way to think of blockchain is that it is a database, a data storage infrastructure, which is protected by both encryption and decentralization. With many copies spread across many locations, all kept up-to-date simultaneously, changes can only be made when there is consensus that it is correct to do so.
This relatively new way (established by the protocol for the cryptocurrency Bitcoin in 2008) of managing and protecting data can be used anywhere a shared database is needed that can be accessed and used by different people or organizations. One way of looking at it is that data security is ensured by mathematics (cryptography), rather than having to rely on the reliability of whoever the data is in hands at any given time.
Blockchain is valuable for any type of transaction where securities and timestamps must be securely recorded, which is why it is of particular interest to financial services companies. However, it is also potentially useful for any process that involves tracking the movement of data between parties, so it has applications in commerce, supply chain, logistics and provenance.
1. BLOCKCHAIN FOR TRACKING AND DISTRIBUTION OF VACCINES
Developing vaccines for Covid-19 is expected to be the first step in defeating the virus, but governments around the world face the daunting task of distributing it to their populations. With a limited supply and the need to stay in a refrigerated condition, this is a great example of a problem for which blockchain provides a solution.
Over the next year, we are likely to see blockchain being used to track vaccines from the point of manufacture to the patient.
Currently, IBM is a leader in the field in implementing blockchain-based solutions to these problems. The company has a system in place and is now in talks with pharmaceutical companies to launch a pilot project.
Two UK hospitals are also testing an expansion of a blockchain system currently used to track the distribution of chemotherapy drugs and the Covid-19 vaccine. Vaccine shipments are equipped with internal sensors to ensure they do not exceed the safe minimum temperature.
If these projects are successful, then it looks like another very valuable use case for blockchain will be established, and we can expect to see it replicated on a large scale.
2. BUSINESS BLOCKCHAIN
Enterprise blockchain, also known as private blockchain or authoritative blockchain, simply refers to implementations that, unlike the flagship use case of bitcoin and cryptocurrencies, are under the control of a centralized ‘owner’, usually the company that implemented the chain.
While cryptocurrencies have proven their strength (it doesn’t seem like it’s ever been successfully hacked or cracked), companies around the world are busy proving that they can also drive efficiencies and lower costs in day-to-day operations.
Investment in blockchain technology by businesses is forecast to reach nearly US $ 16 billion by 2023. By comparison, spending was said to be around US $ 2.7 billion in 2019, and we will see this acceleration increase over the next year. .
Banking and financial services will undoubtedly lead the way thanks to their obvious suitability for registration and accounting, as well as the disruptive influence of cryptocurrencies themselves. Beyond that, applications will increasingly be seen in healthcare, manufacturing, distribution, and professional services.
Confidence in technology is also growing, with a recent Gartner survey finding that 14% of enterprise blockchain projects went into production in 2020, compared to 5% in 2019.
3. THE RISE OF NFTS
NFTs are certainly a trending topic right now and something that we are going to hear more about throughout the year. It stands for non-fungible tokens, which are essentially digital assets (images, music, code, contracts) that live on a blockchain and therefore can be said to have value due to their uniqueness. In the short term, this is creating new ways for some hardworking people to make a lot of money — for example, singer Grimes, who sold works of art like NFT for $ 6.6 million, and the NBA, which made $ 230 million. in baseball video sales. clips in your Top Shot market.
Some people called them “digital collectibles” because, unlike most digital files, they cannot simply be duplicated and copied. In short, it brings the economic principle of scarcity into play for the first time in the digital asset arena. While it may seem like fun at the moment, the technology could have far-reaching implications.
Over the past decade, many of us have become increasingly comfortable with the idea of buying and owning digital assets; We may have spent thousands of dollars creating collections of digital movies, music, books, productivity software, or video games. But in the digital world, nothing we buy is unique or personal to us; in fact, we often don’t even own the things we buy; we are simply paying for a license to use them.
NFTs are interesting because they provide a way to certify and authenticate ownership of just about anything, tangible or intangible.
4. BLOCKCHAIN AS A SERVICE
The distribution-as-a-service model was key to the rapid adoption of technology trends, including cloud computing, the Internet of Things (IoT), and artificial intelligence (AI). Blockchain is likely to be next, with companies like Amazon, IBM, and Microsoft offering or developing tools and platforms that allow companies to take advantage of technology without making initial investments in infrastructure and skills.
An example is a contract that executes automatically when the conditions are met.
5. EXPERIENCE IN BLOCKCHAIN, A HIGHLY NEGOTIABLE SKILL
Blockchain is not immune to bottlenecks caused by a shortage of workers trained in emerging technologies. This means that if you have a career in technology, developing skills around engineering, implementing, or maintaining blockchain solutions is likely to set you up for a bright future.
As with AI, there simply aren’t enough trained blockchain professionals to keep up with the big industry plans to implement it across all areas of operations. As more and more blockchain projects begin to prove their usefulness throughout 2021 and beyond, the number of projects in development will increase rapidly.
6. THE CRYPTOCURRENCY CRAZE CONTINUES, BUT STABLECOINS OFFER A SANCTUARY
From the mystery surrounding the anonymous creator of Bitcoin , to Elon Musk’s propensity to make market-moving announcements, to the price volatility that can have billions removed from market caps in minutes, the world of cryptocurrencies is certainly not boring.
Of course, while this is a lot of fun for most of us, for banks and financial services, where long-term stability and profitability is key, it can be challenging. In recent years, the concept of stablecoins has risen in popularity, precisely because they provide a haven from the crazy peaks and valleys of cryptocurrency development values.
Cryptocurrencies like Tether, TrueUSD, and USDCoin link their values to centralized (fiat) currencies in the real world. This means that while they are not potentially as lucrative (or indeed ruinous) as speculative investments, they do offer stability, which is essential for a currency that can be used as a store of value and as a medium of exchange.