According to a research study by PWC, the global GDP is expected to grow by $1.76 trillion over the following ten years, thanks to blockchain technology. Taking a look at the top five applications of the technology, from healthcare and public sector services to industrial production, financial services, logistical distribution, and retail, we assess the potential economic value that Blockchain may offer.
Blockchain technology and cryptocurrencies like Bitcoin have a long-standing relationship, but there is much more to it, particularly in the ways that public and private businesses secure, share, and use data. Businesses are turning to innovative solutions to manage the COVID-19 pandemic’s effects, which has resulted in a number of disruptive developments.
According to the report, Blockchain can help businesses restructure and reorganise their operations in light of improvements in society and organisational trust, transparency, and efficiency. A favourable regulatory climate, a prepared business ecosystem, and the right industrial mix will all be necessary for a successful adoption of blockchain.
Global economic upswing
Asia as a continent has the most to benefit from the use of blockchain technology. The two countries with the largest potential net gains from the blockchain are China ($440 billion) and the United States ($407). Over $50 billion is expected to be gained by five additional nations — Germany, Japan, the UK, India, and France.
However, the benefits differ by country, with manufacturing-oriented nations like China and Germany reaping the greatest rewards from provenance and traceability. In addition, the United States would gain more from its application to payments, identification, and credentials in addition to securitization.
On a sectoral basis, public administration, education, and healthcare appear to be the most notable winners. By 2030, it is expected that the public administration, education, and health care sectors would generate $574 billion in revenue as a result of the efficiency that blockchain technology will bring to these fields.
Meanwhile, leveraging blockchain to engage customers and satisfy the demand for provenance and traceability through the use of blockchain technology will assist business services, communications, media, the art industry, and the fashion industry, as well as wholesalers, retailers, manufacturers, and construction services.
The effects of blockchain
Democracy, among many other fields, can benefit greatly from blockchain technology:
- Chains of Supply
The ability to track food from farm to shelf has exploded recently. Walmart and IBM are working together to leverage blockchain technology. Suppliers can track the manufacturer throughout the supply chain and locate the point of food contamination. The transparency of blockchain technology may also make it possible to determine the origin of products, which is critically important in today’s society. - Energy industry
If consumers can use blockchain technology to sell spare energy to their neighbours, utility companies may lose market power. As supply and demand affect price, much like in the financial markets, there may even be a range of pricing. - Governments
Blockchain pilot programmes have been launched by governments. to use technology to increase efficiency. Blockchain is used in the UK to manage student loans and track disadvantaged benefits. The government claims that by replacing paper, blockchain might reduce corruption, fraud, and costs. The technology is being used by governments to store documents, including land titles. Deeds and property titles may be listed in the ledger. - Healthcare
The elimination of paper trails in healthcare and the secure, uncompromised access to patient medical records is a much-needed innovation. Decentralized medical data ledgers might potentially aid in the fight against disease and infections. - Music business
Rights and revenue must be safeguarded when technology is used in the music industry. The music industry would completely transform if piracy were eliminated and fans could pay with bitcoin to download music stored on blockchains. The right personnel would be compensated. Inactive distributors won’t be a concern for artists. Blockchain ledgers that are decentralised could be used to handle payments and rights.
Blockchain disrupts banking
Using blockchain technology, the banking industry is already expected to save up to $20 billion within this year itself. But saving money is merely one aspect. Would we even require traditional stock markets? Cryptocurrencies, might take up the role of publicly traded or privately held company shares, and blockchain technology would record the transfer on a decentralised ledger. It would also seem logical that physical money would eventually give way to digital money, with market emotion dictating cryptocurrency values just as economic indicators do today.
When digital currency replaces paper currency, what will central banks do? Cryptocurrency has already been made legal in Japan, and other countries will follow the market’s development. If someday, existing governments and administrative systems become obsolete, central banks could even become the oversight bodies, in charge of creating the regulatory framework and organising the financial sector’s progressive use of blockchain technology. Blockchain technology has a promising future and will have many advantages. The adoption of the technology will determine how it affects global financial markets.
Top banks and government agencies throughout the world make significant investments in blockchain technology. Bank CEOs have expressed scepticism of Bitcoin but favour the underlying technology. To avoid falling behind, the central banks of the entire world will probably be the first to act. JPMorgan Chase & Co. has already created a new payment method using blockchain technology. IBM has been given the responsibility of adopting blockchain to transform internal operations by numerous corporations.
Digital transformation is a priority
As they rebuild from COVID-19, the digital transformation of crucial business activities and procedures is one of the top three objectives of CEOs, globally. In order to function, identify strategic potential and value, and promote industry cooperation, companies need the backing of the C-suite. Establishing proof-of-concept applications that can be scaled and expanded will enable businesses to recognise the value while boosting confidence and transparency in the solution to fulfil blockchain’s promise, given the level of economic upheaval enterprises are facing.
To maximise the economic potential of blockchain, energy overhead must be controlled. Companies will need to adopt innovative methods for consolidating and sharing infrastructure resources to lessen reliance on conventional data centres and technology-related energy usage as corporate and government action on climate change, including Net Zero transformation, grows. There are various ways that blockchain technology could help the environment. However, to promote the adoption of cutting-edge technologies like blockchain, bettering the digital infrastructure is urgently required. To create future energy systems, regulators must keep up with the rapidly advancing blockchain and other digital technologies.
