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Post the financial crisis in 2008, Bitcoin came into existence and gained a lot of prominence gradually. While the mainstream viability of cryptocurrency is still speculative, blockchain has emerged to be one of the prime technologies and is expected to do big things – solve problems and open a plethora of opportunities across industries.
As people realize its wide applications day by day, blockchain continues to grow in popularity.
Looking at the year gone by, here are some key observations on how blockchain fared and what it is expected to change for organizations.
More traditional companies are looking into blockchain technology
We see more and more companies using this cutting-edge technology or are in the process of implementing it, given its myriad applications. Organizations are now building capabilities that are needed to push blockchain into mainstream adoption. Industries that are seeing an increased adoption of blockchain are banking, financial services, insurance, supply chain management, healthcare, e-commerce, gaming and academics.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has launched a pilot Global Payment Initiative (GPI) service to join the growing blockchain and fintech services.
Cost reduction and process simplification are strategic values that blockchain brings to the table. We’ve seen the adoption of blockchain in payments, remittances, provenance, and traceability in the early days, which is consistent with the expected returns. While there are applications of blockchain that promise to deliver a top-line advantage to firms, in 2018 and 2019 leaders are expected to continue adoption of cases with clear bottom-line benefits.
More real-world use cases of blockchain technology beyond financial transactions
We are also now seeing some real use cases or proof of concepts being rolled out in other industries. To name a few top-line benefits, blockchain helps prevents perjury in supply chain management as it allows the record of transactions to be maintained in the form of an immutable ledger. Leveraging its various advantages, an Australian truck and transport insurance company National Transport Insurance (NTI) has launched a pilot program to deploy blockchain technology for end-to-end tracking of Australian beef exports.
Healthcare is seeing a rising traction of blockchain adoption as it enables creating records of patients’ treatments and provides doctors with relevant information by bringing all of the information online in a much more secured manner.
Blockchain has found inroads in talent management as well. SP Jain School of Global Management, India’s top ten business school, has issued 1,189 blockchain-based certificates to graduates who recently obtained degrees and professional certifications. The certificates which are now live on the Ethereum blockchain will allow prospective employers and other parties to verify the authenticity of a job seeker’s educational qualifications without having to contact the business school.
Blockchain enables secured transactions as it is encrypted and, hence, it is a great alternative in areas such as identity management. With its array of benefits, it is safe to say that it will be instrumental in trade, fraud detection, policy management in insurance, government and public sector, as well as food safety and provenance in agriculture.
Innovative startups will disrupt the industry with blockchain tech
Fast growing startups have found themselves in the position to be able to disrupt other businesses in their sector. They are headed by executives who are experienced and well-connected in their industries. These are the businesses that are often able to apply blockchain technologies in ways that are truly a part of their business model, as opposed to supplementing it.
A 2018 Blockchain Global Survey by Deloitte revealed that established companies face a host of legacy concerns and are trying to make blockchain fit into an already existing business paradigm that may or may not benefit from the introduction of this technology. The emerging disruptors, on the other hand, have business models inspired by blockchain. They are experimenting and building without the constraints of legacy business processes. They focus energy on what is possible and then deal with any challenges as they rise.
Government bodies have started implementing blockchain
Every technological innovation has to be backed by the government in some form or another, and blockchain is no exception. In order to bring blockchain to a wider audience, it has to be legalized by the government, more so because potential applicants such as banking, insurance, pharma etc., operate within the boundaries of current regulatory norms.
A number of initiatives have been implemented across jurisdictions, both at federal and state/provincial levels, using blockchain to improve services and transform intergovernmental and citizen transactions. Applications like title transfers and identification have gained maximum traction for blockchain in the government sector.
In geographies like Switzerland, Thailand, and Canada, the government has successfully deployed blockchain to improve processes. To name a few, Swiss National Postal Service and Telecom Leader are building a blockchain platform for their own blockchain-based applications, and Thailand’s revenue department is tracking VAT payments using blockchain. Very recently Dubai’s official government credit bureau announced that they are introducing digital payments to the public sector.
While a lot of blockchain initiatives have seen the light of day, many are still in pilot stages. In 2019, these initiatives will pick up pace sooner than we know.
Zac Cheah is CEO of Pundi X.