A recent report from the World Economic Forum predicts that 10% of GDP will be stored on blockchains or infrastructure linked to blockchains by 2027.
Report further laid out that increased financial inclusion in emerging markets as critical mass in gaining footprint in financial services on the blockchain. New services and value exchanges are developed directly on the blockchain by disintermediation of financial institutions.
Blockchain technology in its present form is often criticized for failing to match present payment network outputs or meeting the requirements of economic systems and governments. In the case of crypto currency like Bitcoin, it was designed to enable a global network to securely transact and exchange value without the need for an expensive intermediary to solve the problem, probably in a way which it has proven successful.
This means that everyone involved in the financial industry is likely to notice something. Unfortunately it has not been the case and has led the common man to find it difficult to assess whether they are worth their time and investment attention.
Let’s make it simpler how blockchain technology operates before evaluating how blockchain going to affect other industries. To simplify how block chain transaction take place, compare with any online publishing service (example Financial Times). The Internet enables anyone anywhere in the globe to publish data. A blockchain and there are many public and private individuals, just as websites allow anyone to send value anywhere in the world where they can access the blockchain file without the need of intermediary institutions.
According to (Catalini and Gans, 2019) Blockchain are linked to a reduction in two key costs: the cost of verifying the transaction attributes that can be recorded on a blockchain and the networking costs. For a market to function, key attributes of the individuals, firms, goods and services involved need to be verified and audited before and after transactions take place.This method is often labor intensive or needs third parties to guarantee market security
This implies that the job done by an army of bank office employees to record transactions, check identities and deter fraud can now be accomplished much more rapidly and precisely through pure blockchain technology.
But the practical application for blockchain technology reaches further than financial assets, in a way any type of digital asset and critical information can be tracked and trader through a blockchain. For example the construction industry and the IT industry, often require problems related to cooperation with subcontractors and the project plan are amended from time to time. Such “who where when why information” problems can be addressed through blockchain technology.
According to Harvard business review, experiments of blockchain technologies in other industries are in early stages. They range from medical records (MedRec, Pokitdok) to digital rights and micropayments (the Brave browser, Ascribe, Open Music Initiative) identity (Uport) and supply chain (Everledger, Hyperledger).
Companies such as Circle and Abra benefit from the reduced expenses of blockchain technology for cross-border payments, competing with existing market leaders such as PayPal, TransferWise and other transaction companies. Both Visa and MasterCard are exploring related technology uses to enhance the way payments are processed efficiently.
Blockchain technology appears to be one of the most impactful technologies beyond the financial industry. While the technologies already hold the promise of a massive change to our current systems and structures, these changes are still years away. It requires adoption, testing, supporting legislation (example libra going through legislation phase in US) and legal practice for users, businesses and countries. Blockchain technology is going to impact directly or indirectly in day to day life and its field of use is solely going to be expanded from here on.
Catalini, Christian and Gans, Joshua S: Some Simple Economics of the Blockchain (April 20, 2019). Rotman School of Management Working Paper No. 2874598; MIT Sloan Research Paper No. 5191-16.
Harvard Business Review:
World Economic Forum: