While the long view implications of blockchains seem universally poised to make an impact, many skeptics question the near term applicability and feasibility of the technology. Besides the fact that the most popular applications of blockchain, like Bitcoin, are not designed for the masses, there are also a number of regulatory concerns around scaled, decentralized systems.
Dissecting these worries, and diving into the nuances and subtleties of the broader blockchain ecosystem, it becomes alarmingly clear that there lies tremendous opportunity ahead for technologists and industry leaders alike to find clever implementations of the technology. Though it can be hard to predict the time scale of mass adoption, there are a number of utilizations of the algorithms and software that will be used, tangibly, in the real world.
Here are 4 promising ways that blockchain technology will be used:
One of the most alarmingly clear benefits of building via blockchain systems, rather than incumbent architectures, is the ability to bring security and stability to scale. Blockchains, at a high level, are effectively public ledgers that cryptographically log and store important information within a network. All of this data is encrypted and immutable, meaning no one single party can alter or manipulate the data. This eradicates, for the most part, the threat around fraud and spamming.
Furthermore, blockchains are decentralized in nature, meaning all of the important information is decentralized across a number of different nodes within the system. Because no single access point is vulnerable to major security risk, the threat of cyber-attacking, which is rising in recent years, is greatly mitigated. We can expect to see a number of systems – marketplaces, social networks, data stores – leverage the blockchain to provide security for their users. Enterprises, especially, are likely to adopt and implement the technology to protect their expensive and valuable data.
From a technical perspective, Bitcoin, perhaps the most covered application of blockchain, is not designed for scale. In its current form, it will not be able to support wide scale usage or be able to function as a widely used and accepted currency.
There are, however, a number of inherent benefits of using a blockchain-backed currency to manage payments and transactions across international borders. Therefore, we will likely, quite inevitably, see a transition from fiat to some sort of digital currency. To support the internet age, we need a financial instrument that can support the masses of consumers, while still providing stability and security.
SparkleCOIN, a team building for this exact mission, has architected a cryptocurrency and ecosystem that enables “consumers to use their token in real world transactions for goods and services.” You will soon be able to use the currency to shop and purchase products and services from the “world’s most trusted online retailers, including Target, Walmart, and Amazon.” They, among a few other players in this space, are excited to accelerate solutions for many of the biggest blockers in the crypto-world: liquidity and adoption.
- Automated marketplaces.
A major problem with the existing infrastructure of many of the world’s most valuable and important industries is that they largely rely on a number of different middlemen to manage and organize the system. This is most apparent in massive components of our modern economy. Think the government, healthcare, freight…etc.
The problem with relying upon human-based intermediary parties, as so many of these industries do, is that these players have incentive misalignment, and often drive prices upwards while slowing down the funnel. Using blockchains, we can supplant the need for error-prone, manual processes and automate everything with algorithms. Furthermore, we can leverage core features of the blockchain, like smart contracts, to secure information and significantly diminish risk of relying and trusting middlemen. This not only promises for a more efficient workflow, but also one that helps lessen prices for consumers and improve overall industry dynamics.
- Accessible financial services.
In 2017, there are over 2 billion (yes, with a ‘B’) adults who lack access to modern financial services. They are unable to securely store their assets, invest in stocks, or take out loans. This is a serious waste of human potential, given that we are excluding them from participating in the benefits of the modern world.
Blockchain can help us to make financial services ubiquitous by providing a stable, scalable system that we can bring to other countries to help them accelerate growth quickly. Cryptocurrencies, in particular, can easily be shared internationally and are not bound to one single country’s stability. Developing countries will be able to accelerate past fiat and immediately transition towards digital currencies (which have a number of inherent benefits).
While there are likely to be a number of “non-FinTech” applications of the technology, it is obvious that there is serious potential here to disrupt the financial world. This will affect a number of countries, not just the biggest players.