The hype around Blockchain technology in recent years has been massive, with several divided opinions; those who believe the technology is the future of the world and those who believe it is overrated and will not necessarily have much impact on the long run. There are also those who know next to nothing about the technology and would, either not be bothered or want to learn more about it. Whichever group you belong to, there are lots of things happening in the world today that support the fact Blockchain Technology is here to stay.
Uses and Applications
The Blockchain technology was invented by Satoshi Nakamoto (his identity remains unknown) who created a peer-to-peer version of electronic cash, known as Bitcoin. The Blockchain is the technology that runs Bitcoin and it has evolved from its use in the cryptocurrency industry to applications in many other areas. It has become especially useful in areas where transactions between two parties need to be recorded in a permanent way without needing third-party authentication. The application of the technology is now being explored for use in the shipping and logistics industry, with startups like Shipchain taking the lead. Recently, IBM and the shipping giant Maersk, announced a joint venture using blockchain technology to digitize supply chains and improve global trade as a whole. In finance and banking systems, blockchain is being developed to improve international payments, reduce the challenges of trade finance and to reduce fraud by properly establishing identities of parties involved in a transaction. Healthcare, manufacturing, energy, education and many other industries have already identified the usefulness of the technology to businesses and consumers alike, and a lot of work is being put into developing blockchain for these various facets of life.
There is a lot of collaboration going on among top global companies on huge blockchain projects all over the world. These projects are focused on developing the technology for commercial use in various industries. The World Economic Forum estimates that 80% of banks are actively working on blockchain projects. Examples of such projects include the consortium formed by R3, a Fintech firm and several banks and an IBM-backed Hyper Ledger Fabric project, which is a trade finance platform for international payments using blockchain. In 2017, Walmart and seven other food companies teamed up to work on improving the traceability of foods such as chicken, chocolate and bananas in the supply chain by using blockchain technology. Also KPMG and Microsoft have teamed up to create and implement a solution that uses the blockchain technology to discover and test ideas based on market insights. The collaboration is expected to have blockchain ‘nodes’ in Frankfurt, New York and Singapore where cases of the use of the technology will be created and demonstrated to help clients achieve their strategic goals. All these high-powered investments are geared at making the technology accessible to more people in the near future.
Apart from investments by big companies and banks, there has been an increase in the number of blockchain-related startups. These companies include those that build decentralized applications, cryptocurrency mining companies, hardware wallet manufacturers and companies that facilitate cryptocurrency investments or ICOs (including ICO-hosting services). These startups are looking to revolutionize operations in different sectors. For example, several finance blockchain startups are looking at ways to provide better access to funding in developing areas of the world by using tokens. In healthcare, startups want to create immutable records for patients and hospitals, as well as reduce the distribution of fake drugs through records created by pharmaceutical companies on the blockchain. Many other industries are set to benefit from innovative ideas and improved mode of operations using the blockchain technology.
Improving Awareness and Education
Experts believe that 2018 is the year blockchain will go mainstream. This has been as a result of efforts focused on educating the investors, entrepreneurs and the public on the use and impact of blockchain. There are many conferences and seminars where information on blockchain could be accessed. There are also a lot of websites and blogs that are provide material on blockchain and cryptocurrencies; information could also be accessed on social media (Facebook, Twitter, YouTube etc.). On the whole, there is a lot more content on blockchain available online since 2016 until now, and it is now much easier to access information about it and it uses. In spite of the fact that many people are still very cautious about the technology, conversations around it have increased tremendously all around the world.
The relevance of smart contracts in Legal issues
Ethereum Smart Contracts are digital contracts, otherwise known as self-executing contracts or blockchain contracts. Contracts could be converted to computer codes and replicated on the system where it would be supervised by the network of computers that run this blockchain. With smart contracts, one could exchange money, property or shares in a transparent manner without conflict. So, instead of having a lawyer draw up an agreement or contract for you, the smart contract can digitally facilitate and authenticate a contract and then go on to implement the negotiation or execution of the contract.
In his explanation of smart contracts, Vitalic Buterin, the 22-year old programmer of Ethereum, explained that in a smart contract approach, an asset or currency is transferred into a program “and the program runs this code and at some point it automatically validates a condition. Then, it automatically determines whether the asset should go to one person or back to the other person, or whether it should be immediately refunded to the person who sent it or some combination thereof. In the meantime, the decentralized ledger also stores and replicates the document which gives it a certain security and immutability.
Blockgeeks Inc. gave an example of using smart contracts in renting an apartment using the blockchain, where the payment is made using cryptocurrency and a receipt is issued. The landlord is expected to give a digital entry key by a specified date and if he fails, the blockchain will release a refund to the renter. If the key is released before the specified date, the blockchain will release the fee to the landlord and the key to the renter respectively on the agreed date. Smart contracts are expected to be applied in insurance claims by automatically triggering a claim when certain events occur, mortgage loans and employments contracts, to mention a few.
Regulations and Government Involvement
Most people have reservations about the blockchain technology due to the fact that its operations occur in an unregulated space for now, which to them is a red flag. This is however gradually changing. While there are no Federal laws of the United States that explicitly show government backing of the use of blockchain technology, some states like Texas and Kansas have a friendly disposition towards the use of cryptocurrencies and the blockchain technology. Recently, the State of Wyoming House unanimously approved two pro-blockchain Bills. Also in California, a Bill was pushed to recognize digital signatures as well as other contracts that are stored on the blockchain. Governments are also involved in funding research into blockchain, as the European Union plans to boost blockchain research funding from 83 million EUR to 340 million EUR by 2020. Furthermore, Several governments across the globe are considering putting in place their own forms of cryptocurrencies. While some argue that government involvement may thwart one of the biggest advantages of cryptocurrencies and the blockchain technology, which is decentralization, there is no doubt government-backed cryptocurrencies will change international monetary systems as we know it. Also, government involvement and regulations will open up new opportunities for the adoption and use of the blockchain technology across the world.
Follow the money
There is no doubt that a lot of money has been raised for many new blockchain enterprises. In 2017, about $1.74 Billion was raised in the top ten Initial Coin Offerings (ICO), with a total of $5 Billion raised in about 706 ICOs. Hdac, a digital service platform, raised $258 million, Filecoin which will focus on providing storage services powered by a blockchain, was a close second with 257 million and Tezos, a blockchain network aiming to facilitate smart contracts, garnered $232.32 million. This shows that the industry is currently in high demand among investors and this trend is very likely to continue in the near future.
Jobs in Blockchain on the rise
There are more blockchain related jobs now and this is expected to continue. Jobs that did not exist five years ago are now evolving and it normal to see job openings such as engineers, developers, miners and analysts of the blockchain technology. It was reported at the end of 2017 that the number of Blockchain jobs had risen by more than 200%, as seen in the statistics published by indeed.com.
Rising Value of Cryptocurrencies
In spite of several Bitcoin meltdowns this year, the overall value of cryptocurrencies continues to grow. Cryptocurrencies such as Ripple’s XRP and Ethereum have actually gone up in value. These activities have resulted in the increase of the underlining blockchain operations such as mining. Several blockchain companies have moved to invest significantly in mining operations.