Beyond the Hype: The Real Impact of Blockchain on Economy
What started as an infrastructure underlying Bitcoin cryptocurrency, the Blockchain technology has emerged as a true game changer. The technology, while introducing new possibilities and applications every now and then, has gained its own share of hype and scams.
And because of this, various Entrepreneurs and developers are still confused about what would be the real impact of Blockchain technology on the economy. They are still doubtful about the blockchain’s effect on businesses and if they should invest in Blockchain development or not.
Now, assuming that you are one of those Entrepreneurs and are hoping to get a crystal clear idea of the whole scenario, let’s talk about Blockchain technology and its future in this article.
But before we dissect blockchain technology and its impact on the economy, let’s first go through a few statistics highlighting the current state of the technology and how the world is answering how to use Blockchain technology.
History of Blockchain: A Brief Overview of Three Generations
1. Blockchain 1.0
The first generation of Blockchain was meant to improve the traditional monetary system. Bitcoin and other cryptocurrencies were introduced in this phase,which were mostly written in C++ and used to employ PoW (Proof-of-Work) consensus model.
Though the Blockchain-based cryptocurrencies enhanced transactional experience, developers realized that the technology holds immense potential beyond cryptocurrencies. This is what became the reason behind second generation inception.
2. Blockchain 2.0
While Bitcoins remain a hype in the market, Ethereum and Smart Contracts came into the limelight in the second Blockchain generation. The developers started treating Ethereum not merely as a cryptocurrency, but also a platform to deliver a scalable experience and build dApps.
They also started considering the concept of Smart Contracts to make agreements more automated, secure, and effective – a detailed knowledge of which can be taken from our Smart Contracts guide.
3. Blockchain 3.0
The current generation, i.e, Blockchain 3.0, is supposed to be the generation showcasing the most efficient Blockchain-based solutions. In this generation, where the impact of blockchain on the economy and market will be on the forefront, various challenges associated with Blockchain development like inability to process cross chain transactions have been resolved. And the team of experts blockchain app developers have gained the advantage of going with different consensus mechanisms besides PoW for their projects.
Besides, concepts like DLT (Decentralized Ledger Technology), IOTA and COTI have also been introduced in this generation and become the answer to how blockchain will change the world. While evolving from 1.0 to 3.0, Blockchain gained a huge momentum in the market – in one or the other form.
The technology continued to enjoy wider adoption across the globe – though not uniformly in all countries – a hint of which can be taken from the graph shared below looking into the blockchain impact on the global economy.
The lack of uniformity that was seen in the country wise adoption of Blockchain is same as its industry wise use cases. While Blockchain technology has been embraced by a vast number of industries, not every industry welcomed the technology with same efforts and at the same time – thus keeping why use blockchain reasons fewer.
While some industries introduced Blockchain in their business model at a very initial level, some are still struggling with determining the role of the technology in their domain and in the types of funding that they can receive.
Taking the same thought forward, let’s take a walkthrough of what industries have been revolutionized by this technology and their impact received, followed by what industries are most expected to answer why use Blockchain in the coming time.
Industries That Enjoyed Successful Transformation with Blockchain Development
1. Banking and Financial Services
When focusing on the blockchain and economic development , the foremost industry that takes the limelight is banking and finance.
The combination of Blockchain and Fintech has simplified banking processes in many ways:
- enforced identity verification and management process
- introduced crypto payments
- eradicated intermediaries.
Besides, the convergence of the two, which has resulted into decentralized finance led financial software development companies to automate has also automated banking and accounting processes – right from organizing spreadsheets to filing all tax files effectively.
2. Real Estate
Blockchain is taking real estate to the next level. The technology has opened new doors for potential investors across the world to invest into the real estate economy. Some of the advantages of Blockchain in the industry can be seen in how it has authenticated the digital transactions, reduced siloed databases, and instilled trust in all the property buying and selling solutions – both at the commercial and residential front.
An example of the scope of blockchain growth in Real estate domain is Ubitquity.
Blockchain technology in Healthcare industry has proven to be more than a baseless hype. It serves the healthcare organizations with better data collaborations that not just increases the probability of accuracy in diagnosis but also upgrades the treatment level.
The use of Blockchain in the healthcare and pharmaceutical sector also streamlined the supply chain and medicine verification process. It enabled the medical domain stakeholders to make payments using crypto wallets, change model for drug design, and deliver a personalized yet trustable experience to both patients and medical practitioners.
One such healthcare startup that has incorporated Blockchain in its process is Gem Health Network.
While mlearning app development is what brought education from traditional classrooms to real-time accessible mobiles, Blockchain has taken it to the next level.
The technology has simplified the process of record keeping and verification of certificates. It introduced the concepts of verifiable open badges which enables students to maintain a permanent record of their certificates and other documents and share with prospective employers. Also, it streamlined public assistance for both students and families.
When looking for the answer to why use Blockchain in Education, one company that has come up as the right answer is Sony Global Education. The brand has created an educational platform with the help of IBM that employs Blockchain to store and share student records securely.
Blockchain has bridged the gap between buyers and sellers by reducing the interference of third party intermediaries. The technology, in the form of Blockchain wallets, have eased the process of peer-to-peer payments. Besides, it has also added a tint of security and transparency using the concept of Smart Contracts – a clear indication of which is OpenBazaar.
6. Transport and Ride Sharing
Blockchain technology has also proven to hold potential to change the landscape of public transportation and ride sharing economy.
On one side, blockchain-powered applications have encouraged users to commute via public transportation and get rewards in the form of crypto-tokens,on the other side, the technology has decentralized On-demand ride sharing economy, i.e., that of Uber and Lyft. They have introduced new options that enable drivers and riders to set their own rates, offer additional services like roadside assistance and ultimately, create a more user-driven value-oriented market.
One such app that proves how much is the Blockchain worth in ride sharing industry is Arcade City.
7. Logistics and Supply Chain Management
Blockchain also improves the scenario of Logistics and Supply chain management domain. The technology lets companies record every transaction and process – right from manufacturing to sales, storage, and shipment – in decentralized blocks. And in this way, lower down the risk of time delays, human errors, and associated costs.
The Food supply chain and safety system designed by Walmart in collaboration with IBM is what indicates the real impact of Blockchain technology in the domain.
In the Agriculture sector, Blockchain has introduced a decentralized mechanism that makes it easier to trace crops and other products. It induces trust between merchants and farmers without involving third-parties, which eventually enhance the pace of transactions and cut down the associated cost.
One company that is already highlighting how Blockchain could change the world of Agriculture is AgriDigital.
Blockchain is also gaining a huge traction in the field of Cybersecurity. The sector rightly fits the textbook definition of impact of blockchain technology on business.
It empowers users to maintain their unique and immutable identity records, which can’t be accessed or interpreted by anyone without their consent. It also prevents DDoS attacks and add another layer of security on private messages.
One of the best examples to look at the Blockchain growth in the cybersecurity domain is Guardtime. It creates a keyless signature that goes with the cybersecurity requirements of the US Department of Defense and helps in securing health records of million of Estonian citizens.
10. Gaming and Video Streaming
Gaming and video streaming sectors will also enjoy expansive growth with the incorporation of Blockchain in their processes.
The technology, through its distributed ledger, enables users to exchange assets across digital world, get rewarded, track their uploaded information, and more.
When it comes to how Blockchain will change our life in the field of Politics, the solution that technology comes with is through better infrastructure for casting, tracking, and counting votes.
The technology has introduced the concept of capturing votes on Blockchain as transactions thus eliminating the risk of fraud voting using the characteristic of immutability, transparency, and authentication.
One such Blockchain voting startup that is offering effective solutions in the industry is Follow My Vote.
12. Cryptocurrency Exchange
Another industry that has experienced an optimal growth in its functioning is Cryptocurrency exchange. The technology has eased the process of switching from one cryptocurrency (or crypto asset) to another, and cope up with all the related considerations.
13. Crowdfunding and Venture Capital
Blockchain has introduced the concept of Smart Contracts in the crowdfunding and venture capital domain. This has helped every associated entity to get a better oversight of individual campaigns and cope up with the risk of fraud in this sector.
In other words, it has added authenticity and trust into the spectrum which has made it easier for startups and other companies to get funding easily and effectively.
[Bonus: As we are talking about funding, let’s have a peep into two popular crowdfunding models here – IEO vs ICO: A Comparison Between Tokenized Crowdfunding Models ]
14. Government and Public Records
As discussed in detail in our blog on the role of blockchain in government, the technology has lowered paper-based processes, prevented the risk of frauds, improved accountability in the domain, and much more.
When talking about the scope of the technology in this sector, Samsung is integrating Blockchain in its infrastructure to help South Korean government offer better public safety and transport solutions.
15. Charity and Aid Organizations
Blockchain has also made it possible for users to track their donations precisely. It has provided them with the power to remain updated with where their donations are going and whose hands are they reaching.
This has added a sense of accountability and transparency in the process and helped in coping up with the growing issues of organizations using donated money for other purposes.
One brand that shows why and how Blockchain will change everything in the Charity domain is Bitgive Foundation.
16. Gift Cards and Loyalty Program
Lastly, the Blockchain technology has also given a fresh outlook to gift cards and loyalty program. The technology has reduced the participation of intermediaries in the process of issuing gift cards and regulating sales transactions and put the practice of unauthorized users obtaining stolen accounts to an end. This has made the whole process efficient, seamless and cost-effective.
A use case of why to use Blockchain in this domain is presented by Loyyal.
So, these were the industries that have skyrocketed their ROI by partnering with a blockchain app development agency and incorporating the technology in their business model.
However, the list does not ends here.
With Entrepreneurs realizing that the technology is not a bubble that would pop anytime soon and the growing interest in Blockchain technology trends, has led to many more industries joining the bandwagon.
So, let’s uncover a few of the industries that Blockchain will change this year.
Industries That Blockchain Will Enter This Year
[DISCLAIMER: It is possible that some of the industries mentioned below have already entered the Blockchain domain, but are yet to gain popularity.]
Forecasting is one of the sectors that will experience a transformative change with the adoption of Blockchain and where the impact of blockchain technology on business will be seen most.
The technology will help in gathering and storing data regarding individuals’ opinions in immutable databases. And eventually use the insights gained to predict an outcome that would be much closer to reality.
2. Stock Trading
Another industry that will show interest in how Blockchain could change their world is Stock trading market.
The industry will rely on blockchain to trace securities lending and regulating systemic risk. They will also optimize their processes via automation and decentralization, and enjoy a simplified post-trade events settlement and easier dividend payments.
3. Will and Inheritance
What has been on papers will sooner be recorded on Blockchain. People will be able to write and store their wills and other important papers on immutable blocks that will be automatically executed via smart contracts. These papers will not just be more safer and secure that existing paper wills, but will also enable beneficiaries to enjoy better outcomes.
4. Content Creation and Publishing
Another industry that will be turbocharged with the implementation of Blockchain is Content Creation and Publishing.
The industry, with the introduction of Blockchain, will be able to provide all the creators, artists and publishers an opportunity to create a global, digital and decentralized infrastructure and further manage their digital content effectively. This will put an end to the practice of republishing any content without reference to its original source.
5. Construction and Mining
Blockchain is also supposed to change the landscape of Construction and Mining economy.
It will simplify the process to trace transaction during complex processes of governing regulations and standards. This will induce trust in the process and help prevent hazards associated.
The technology, when used in the Mining sector, will also make it easier to manage approvals of documentation meant for mine design and planning processes, resource estimation, exploration, etc. and enhance the traceability of inventory into ERP process.
Lastly, Blockchain will also be employed for identity verification to ensure that hired workforce have clear record.
6. Sports Industry
Another industry that will be transformed with the advent of Blockchain technology is Sports.
Blockchain will empower brands and sports clubs to easily manage logs of all transactions and sponsorships via cryptocurrencies. It will also help to get rid of ticket scalping and doping in sports by making it possible to maintain a real-time record of every transaction and identity management.
It will enable broadcasting networks to monitor the rights that they have licensed and renewed using smart contracts, which will aid them to deliver a safer and convenient experience to all.
Apart from this, the technology will aid fantasy sports organizations to collect payments from their fans and securely store and manage their athlete data.
7. Human Resources and Recruiting
The technology is also heading to reshape the future of HR and recruitment sector. The technology will not solely offer the opportunity to check the background of potential candidates swiftly and efficiently, but will also help to streamline the process of employee onboarding, performance analysis, cross-border payment, worker mobility, fraud detection, and more.
Blockchain has also proven to have the potential to overcome the challenges faced by the Cannabis industry.
The technology will introduce the concept of Point-of-Sales (PoS) in the cannabis economy to get rid of looping behavior, i.e, same consumer asking for marijuana products regularly exceeding the daily limit.
It will also make it possible for cannabis dispensary system to record and manage all records with access to authorized entities and get an escape from tax fraud issues.
And above all, it will simplify the banking and credit card processing in the industry, which will encourage businesses to consider medical cannabis delivery app development cost for creating a mobile presence and delivering more enhanced experience to their consumers.
Just like Banking and capital market, Blockchain is also predicted to bring a major impact in the Insurance sector.
The technology is expected to make the claim and subrogation process streamlined with its transparency and decentralization characteristics. It is also supposed to provide efficient payment solutions between third parties and insurers, and make it easier to provide more sophisticated pricing to consumers by studying the shared loss histories.
10. Energy Management
Another industry that is predicted to be reshaped by Blockchain technology is Energy management.
The technology, with the help of Smart Contracts, is expected to automate the process of balancing supply and demand in the industry. It will also decentralize the process of buying and selling energy and make it possible for energy/power suppliers to store excessive amount of resources and send them to areas suffering from its shortage.
The introduction of Blockchain will also make it possible to record micropayments, read billings, monitor CO2 emissions, regulate green electricity certification, cut down the overhead cost, prepare for climatic changes, and more.
So, as we have seen so far, Blockchain is proving to be a groundbreaking technology shaking the foundational stone of various business verticals. However, the potential of blockchain technology and its impact on the economy is not confined to this.
The technology, with its impressive characteristics, is also clearing the obstacles in the path of other technologies. And this way, assisting them in crafting a better future and answering how will blockchain affect the economy, on a technical level.
Let’s have a look into how Blockchain is revolutionizing other technologies before jumping into what business world think about investment in Blockchain application development.
6 Technologies Making a Better Future With the Help of Blockchain
1. Artificial Intelligence (AI)
Blockchain technology is proving to be the powerhouse of Artificial Intelligence world. The technology, through its merger with AI, is introducing a set of opportunities that can enhance the overall experience.
For example, Blockchain is helping AI-powered apps and platforms in getting authenticated access to data stored and managed by other entities and that too without involving intermediaries. This is eventually making it possible to deliver a personalized, accurate, secure, and faster customer experience.
Furthermore, the technology will introduce new business models and lower down the barrier to enter the market. This will make it easier for AI-enabled apps and software to reap higher benefits.
Blockchain is also promising to be the missing link in the AR/VR market. The technology in helping in mitigating common challenges, such as the inability to distinguish between a digital photo and its copy.
3. Internet of Things (IoT)
Blockchain technology comes with a fundamental design that can gear up a higher number of transactions and interactions – something that is a necessity in the IoT ecosystem.
The technology, with its IoT collaboration (also referred as Blockchain of Things), will provide effective solutions to the prevailing challenges in the economy and foster the idea of smart cities and cars.
For example, Blockchain will enable businesses to keep track of the history of every connected device which will ease the troubleshooting process. Also, the technology with its property of distributed decentralization ledger, will make it possible to eradicate a single source failure in the IoT environment that will further safeguard other devices’ data from tampering and collusion.
Above all, it will aid connected devices with independent identity, P2P communication support, and data integrity, which will further help with streamlining the whole process and remove technical inefficiencies.
4. Big Data
While many have the misconception that Blockchain will be a threat to Big Data, it will actually avail the latter in making a better future. The technology will introduce efficient solutions to the prevailing challenges in the Big Data environment.
For example, Blockchain will assist in storing data in immutable blocks and make it possible to secure every chunk of data. It will also add a tint of transparency decentralization to the whole process which will reduce the risk of having no access to data in case any entity gets compromised in any form. And above all, embed trustability in the process.
5. 5G Technology
5G – the technology that is expected to bring a drastic impact on mobile apps in 2019 – will also turn towards Blockchain for unleashing new potential and delivering better experience.
The technology will consider Blockchain as the foundational layer to enjoy higher grades of decentralization, security, immutability, and consensus arbitration.
6. Cloud Computing
Last but not least, Blockchain will also reinvent the Cloud industry. The blend of the two disruptive technologies, also known as Block-cloud, will make it easier to trace who is employing or administering the cloud and audit every individual process.
Besides, the technology will break down the consumer data into small chunks and add an extra layer of security on them with the help of hashing function and public/private key encryption. These data chunks will be later stored in decentralized locations, which will make it easier to protect data from intruders.
With this attended to, we have gone through Blockchain potential impact on different industries and the technologies it will collaborate with for delivering exceptional outcomes.
So, without ado, let’s jump to the prime question of the article, i.e, should businesses invest in Blockchain technology or not.
Is It the Right Time for Businesses to Enter Blockchain Space?
The economic impact of Blockchain is growing exponentially with time – irrespective of the industry in question. It is not just the established companies and enterprises, but even Startups are focusing on becoming a part of Blockchain economy – a proof of which is the insights recorded in the image below.
Not only this, both Entrepreneurs and Blockchain app experts have started investing their time and effort into exploring new opportunities in the domain and finding solutions to the prevailing barriers. An outcome of which is that the graph of Blockchain barriers in the business world is shrinking day-by-day as shared below.
In such a scenario, the answer to the question, “ Is it the right time for Businesses to invest in Blockchain app development” is a big YES. That implies, it has become imperative for every startup and establishment to look ahead to incorporating blockchain into their business strategies. The only thing left for you to do is find a trustworthy and reliable blockchain app development company to partner with. A company that would help you expand your decentralized journey.
Frequently Asked Questions about Real Impact of Blockchain Technology
Q. How will blockchain change the economy?
Blockchain and its impact on different sectors, irrespective of the business domains is manifold. We see it instilling the factors of transparency, decentralization, and immutability in the economy.
What we can reckon is that the economy will only get better and more transparent with the inclusion of Blockchain technology in its ecosystem.
Q. Which industries will blockchain technology impact the most in the coming years?
While blockchain technology is already shaping the picture of several industries, there are some which will see it getting mainstream in the coming time. A few of these are: Energy sector, HR, Cannabis, Sports, and Stock Trading etc.
Q. How will blockchain affect the sharing economy?
There are some issues that have been playing a role in crippling the sharing economy – unclarified surge pricing, unverified riders and delivery persons, etc. Blockchain, with its immutable record and smart contracts, make it possible to bring transparency and security in the system.
Q. How will the Blockchain impact countries’ governments in the future?
There are multiple government bodies like Dubai, China, India, UK etc. that are adopting Blockchain for increasing efficiency and incorporating transparency in their nations. They are majorly using Blockchain for – making land records transparent, lowering the operational cost of managing funds distribution, recording nationals’ identifications in an immutable form.
Q. How can blockchain reduce costs?
Blockchain plays an active role in lowering the operational costs and the cost that operates behind the curtain – process streamlining, security, proactiveness in terms of keeping records in an open and decentralized state, etc.
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