Will 2018 be the year when Blockchain goes mainstream?
With Bitcoin and other cryptocurrencies setting all time high records and more investors willing to take the plunge, blockchain technology has become a key focus for both tech and business communities worldwide. However, moving beyond the digital currency hype, this underlying technology is also enabling innovation and making a real-life impact. While blockchain is often associated with financial markets due to this tie to cryptocurrencies, it has the potential to disrupt industries and businesses around digital transactions and recordkeeping. According to the global research firm MarketsandMarkets, the blockchain market is estimated to grow from $210.2 million in 2016 to $2.31 billion by 2021.
From the “blockchain tourism” in 2016 to pilot projects and proof-of-concepts beginning to move into production in 2017, blockchain is making a significant stride forward to becom a mainstream technology in the future. When blockchain was in its nascent stages, most of the use cases were focused on it as an incorruptible digital ledger, suitable for financial and non-financial transactions. Now its scope extends beyond the banking domain and is applicable to use cases such as food safety, supply chain management, Internet of Things (IoT), healthcare and many more areas. The technology is especially key for the government and public sector, where there are multiple areas of adoption and implementation — from maintaining access-controlled digital records to tax logistics, financial disbursements and litigation settlements.
Land and property transactions are a key area in the government sector where blockchain technology can play a revolutionary role. Lack of reliability and fraud committed by property buyers have been persistent issues with the system. Implementing a blockchain based registry with smart contracts can ease the process of registration, transfer and pricing while also making the records and overall process more transparent. The Andhra Pradesh government is considering such a proposal for revamping their land registries and public distribution system. Smart contracts are essentially self-executing and self-enforcing contracts, where computer programs facilitate the entire process.
Blockchain has also proved its credentials in ensuring the provenance, quality and safety of food products all through the food supply chain. Food safety is a critical topic of discussion around the world with long standing issues such as cross-contamination, unnecessary waste and pilferage. In the case of food recalls, it can take weeks to identify the precise point of contamination, causing revenue loss. As per a report by the Food Marketing Institute and Grocery Manufacturers Association, an average food recall costs $10 million, exclusive of brand damage and lost potential sales.
IBM has signed an agreement with Tsinghua University, JD.com and Walmart to explore food supply chain traceability and authenticity using blockchain technology. In India, IBM has project implementations underway in supply chain finance, trade finance and record-sharing in insurance.
Blockchain has the potential to revolutionize business transactions the same way the Internet did for communications and new trends and patterns will emerge in the near future.
The record immutability of blockchain technology adds to data privacy, since information is revealed only on a need-to-know basis for each participant. Once entered, the data entered cannot be altered without the permission of involved parties, thereby eliminating chances of fraudulent transactions and dishonest claims. IBM Blockchain Platform features a High-Security Business Network that counts cryptography based on most secure commercially available server, tamper-proof cards for the management and malware protection for the database as some its key high-security attributes. . Employing blockchain also reduces the business cost of transactions while simultaneously increasing authenticity and security. For example, Mahindra Finance was able to bring down the time required for invoice discounting process from 7 days to almost within a day, thereby eliminating loss due to delayed payments and locked-up capital. Blockchain is coming to fore as a top-contender for solving an array of cybersecurity challenges and providing end-to-end security.
2018 is predicted to be the year when blockchain will go mainstream and witness adoption across sectors moving beyond BFSI. We will see the technology evolve and mature as there is more awareness around the benefits of sharing investments and information over a blockchain network.
