5 Insights of Blockchain Impact on Various Industries
Let’s be honest: blockchain and cryptocurrency aren’t buzzwords anymore. Today, you can buy gadgets, pay for freelancers’ work, and travel around the world paying with cryptocurrency. Today, numerous developers present their software products based on the blockchain principles. The digital community is familiar with these concepts. However, this is not the case with the old-fashioned world full of paperwork, cash, and legacy tech. But is it about to change?
Remember the Internet? When it appeared, people were extremely skeptical about its future. Politicians and financial experts told that this technology was weird and all these websites were just useless as they didn’t have the real-world value. But the modern world is unimaginable without websites. The Internet survived.
It’s highly possible that blockchain will follow the same way. From over 2,000 crypto projects, we see 100 or even 10 that could really survive. Regardless of exact coins, the main idea looks really promising for the world in general and business in particular. Many forward-looking companies have already jumped on the blockchain bandwagon — from those in the banking sector to even casinos.
In fact, casino operators were among the pioneers to adopt blockchain, as is described in Bitcoin gambling manual by CasinoBoomer. This is also proven by the stats. Back in 2013, 50% of Bitcoin transactions came from online gambling sites. And since then, users have wagered more than $5 billion in Bitcoin playing casino games. Sounds impressive, doesn’t it?
However, today, we’re going to look beyond the gambling industry and learn how blockchain and cryptocurrency affect other businesses.
The Defining Features of Blockchain
To understand what we are talking about, you need some introductory material. If you’re already familiar with the general principles of blockchain system, feel free to skip this part. Otherwise, explore it carefully.
Put very simply, blockchain is a decentralized database that consists of and is maintained by multiple computers. Each active machine holds the same copy of the entire network. Using blockchains, people can easily send, receive, create, and exchange any data, including digital financial transactions.
The data exchange process looks like a simple algorithm:
- A user sends a transaction that is recorded in a block.
- Other users see this block and validate it via the consensus protocol.
- The approved transaction connects to the main chain.
- Users update their copies of blockchain with new info.
This process and the unique tech features like cryptographic protection lead to a few key benefits of blockchain. For example, decentralization provides for no single point of failure because there are no central databases maintaining the network. Hackers and fraudsters physically can’t break into all the participating computers. Cryptography boosts this security measure even more. The idea of transparency allows users to see all the exchanged information, but the anonymity principle conceals the real-world sensitive details. Users can see the in-chain info in the form of a random collection of characters. Finally, immutability doesn’t allow to modify data after it was recorded.
Despite blockchains aren’t perfect, they have a bright future in the world of business. Let’s look at the cases.
Blockchain and Business
In a nutshell, blockchain platforms can establish a brand new form of communication between product/service owners and their customers. Regardless of the industry, technology can change the way you work and interact with partners and clients.
1. Cost Reduction Is the Most Valuable Point
Crypto geeks may disagree with this statement but introducing blockchain in business is all about cutting costs. Surely, the technology has great potential to reshape operations and general approaches to entrepreneurship but, right now, it helps to reduce expenses. Mainly, this advantage refers to connecting producers and clients without intermediaries. Thus, you don’t have to pay additional fees to other participants. Moreover, blockchain cuts costs by optimizing record keeping and removing inefficient processes like double entry of data.
2. Global Implementation Will Take 3-5 Years
The real value of blockchain projects will be understood only when the systems are adopted globally. Since we live in the legacy-oriented world that features various limitations and restrictions, it’s barely possible anytime soon. According to McKinsey, it will take blockchain from three to five years to reach this global scale. The company considers blockchain feasibility in the context of four key conditions:
- Assets. All the possible real-world assets should be digitized to meet the blockchain ideas. The financial sector has made some progress introducing cryptocurrencies. But we talk about other assets such as equities, food, supplies, even air miles, and so on!
- Ecosystem. To reach the global level, blockchain-related projects should focus on cooperation instead of competition. They have to develop common rules and reach perfect coordination. In this case, interoperability may help companies.
- Standards. To get the best conditions common rules and friendly regulations from government bodies or international councils are needed. Right now, the legal framework is poorly developed. Moreover, financial blockchains are subject to extremely tight regulations.
- Technologies. Blockchain systems have to cope with technical limitations, e.g. the famous scalability issue. Many experts say that it’s possible to reach only two out of three key goals (scalability, security, decentralization) simultaneously.
3. Private Blockchains Emerge
Long story short, there are two types of blockchain systems: public and private. The first approach provides for fully independent platforms controlled by the community only. All the most famous blockchains like Bitcoin and Ethereum are public. But they are early birds. The community isn’t ready to use them globally.
Private blockchains are developed and utilized by one or several companies or groups. These systems aren’t decentralized, actually, as they are under control of specific authorities and leaders. For business, private blockchain systems are amazing as they deliver tech benefits and cost reduction but keep the required control over processes.
Today, the leading companies are implementing private blockchains. Tech giants like Apple, Microsoft, and Samsung work on their in-house platforms. Big players also cooperate to create even more global systems. IBM reports that it has launched TradeLens, a blockchain-based shipping solution in partnership with Maersk, the world’s largest shipper.
4. Companies Should Coordinate with Market Trends
For existing and emerging businesses, blockchain can become a game-changer. However, it’s important to plan everything properly. Experts note that all companies must focus on market conditions and capabilities when thinking about blockchain deployment. Taking into account this data, you will be able to design more elaborate strategies.
Generally, there are four roles for businesses that introduce blockchain solutions:
- A leader. Sets new industry standards and delivers the most valuable products.
- A convener. Cooperates with other teams and focuses on shared use cases.
- A follower. Adopts standards provided by others and improves them.
- An attacker. Disrupts other approaches and opts for peer-to-peer systems.
5. Specific and Valuable Use Cases Are the Best
Finally, here’s a bit obvious but still crucial insight. It relates to all innovative markets, not only to blockchain-based ones. Remember to focus on really useful approaches. There are hundreds of trashy projects that copycat others or don’t have a real value. To stand out of the pack, your ideas must be captivating yet feasible, engaging yet practical. Constantly analyze the users’ problems and interests to develop a product/service that will meet their requirements.
Blockchain is here to stay, undoubtedly. It captured the minds of millions of users around the globe. It is reshaping industries now. Forbes mentions ten key spheres for blockchain implementation, including banking, government, and education but there are way more of them. Actually, each and every part of our life can be affected by blockchain. For entrepreneurs that consider implementing this tech, we suggest double-checking their wishes and capabilities. Right now, the blockchain world is similar to the Internet before the dot-com crash, so ask yourself: would you survive in it?