Ten Years in, Here is What Blockchain is Changing
A few friends shared this article with us as it is circulating online, dismissing blockchain as a useless technology. The main argument in it is that blockchain has promised to change everything but “after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain — besides currency speculation and illegal transactions.” It seems there are some inaccurate interpretations and misleading comparisons that we felt obliged to address.
The making of a revolutionary technology
Blockchain is the technology that powers bitcoin, but it is not bitcoin (which is now one of almost 2000 cryptocurrencies). Claiming that blockchain is good for nothing other than “currency speculation and illegal transactions” is like saying that the Internet is all about porn. Even though initially it became popular thanks to the pornography industry, that also drove innovation in tech — credit card verification, online billing systems, video streaming, accessible and reliable connections, cybersecurity. In the early days of the Internet, the majority of its traffic was porn. But then it connected us, it radically changed the way we communicate and do work. And it’s still evolving, merging our human with its artificial intelligence.
It took the Internet 22 years to grow from the Arpanet that was mainly used for email and other Apra-like networks to the World Wide Web. And that was up until 1989. In the following nine years, more and more companies and even governments got online, more and faster web pages started to appear, and then Google Beta was introduced to the world. Skype gave us the ability to call any part of the world without paying ridiculous phone bills, MySpace gave us a way to express ourselves online back in 2003, then Facebook and Instagram took over. It took 36 years of development for Web 2.0 to be adopted. And that started to change EVERYTHING. When it comes to electricity and cars, it also took decades.
Beyond the cryptocurrency speculation
Blockchain is a technology that is only (almost) ten years old. Like the Internet, it is also going through its stage of insanity and speculation. Last year, $4bn was raised by ICO (Initial Coin Offering) projects, a 40-fold increase compared to 2016. With the dark web, the lack of regulation, and the many ICO scams and frauds or pump and dump schemes that have happened, cryptocurrencies have gained a bad reputation. But the cryptocurrency hype has also shown us that the blockchain technology can address fundamental flaws in quite a few sectors.
Visa has already implemented the blockchain technology in its B2B Connect platform, enabling quick and transparent payments between banks. Visa, that can handle sixty thousand transactions per second, is not competing with bitcoin when it comes to making payments. It is implementing the technology behind it for remittance, which allows global transfers to be completed in real time, instead of a few business days. And as the platform scales, the transaction fee will decrease.
Banks like Santander are already using Ripple’s blockchain technology to process real-time payments between £10 and £10,000, reducing the time and cost of settlement for high-volume low-value global transactions. IBM has developed a network that allows international banks to clear transactions in an instant, even to the most remote parts of the world. Mastercard and American Express are also implementing the technology.
Ten years in, it seems like a few corporate giants have come up with a use for blockchain when it comes to payments.
The public sector
Sweden and Brazil’s land registry have already started using the blockchain technology to register land and properties. This ensures transparency and fairness when it comes to handling ownership disputes or in cases when the original paper documents get destroyed or falsified. Such implementation is just one example of how the technology has the potential to cut hundreds of millions of dollars in expenses for public administrations. When it comes to original ownership documents, blockchain minimises the risks of hacking, corruption, and forging as it’s tamper-proof.
The Canadian government is currently testing the Ethereum blockchain to publish funding and grant information in real-time. By 2020, Dubai plans to have all visa applications, bill payments, and license renewals on the blockchain. This implementation of the technology can save the city $25.1 million man-hours and $1.5 billion of administration expenses. The Russian government is also running pilot tests to determine whether the blockchain technology can be effective when it comes to voting.
Can blockchain eliminate corruption, forgery, and cut billions of dollars of expenses? We are about to find out.
A lot of companies operating online that need to verify the identity of their customers ask them to upload pictures of their ID documents, for the lack of a better alternative. Or they store ID information in their databases that are not immune to malicious attacks and can expose their customers to identity theft (take Equifax for example). We need a new and secure way to identify ourselves online. The blockchain technology can help us improve privacy protection, have more control over our data, and reduce the risk and cost of security breaches. SecureKey and IMB are already working together, testing their solution that will help us identify ourselves online in a way that protects our personal data.
“By 2023 the law requires that all prescription drugs can be tracked and traced through the supply chain using an interoperable system.” MediLedger is a project that has already implemented the blockchain technology, creating a track-and-trace process for prescription medicine. It enables a trusted consortium of drug manufacturers, distributors and dispensers while reducing costs, stopping counterfeit from entering the supply chain, and reducing costs.
SimplyVital Health has two health-related blockchain products in development, ConnectingCare which tracks the progress of patients after they leave the hospital, and Health Nexus, which aims to provide decentralized blockchain patient records.
MedRec, an MIT project involving blockchain electronic medical records, is designed to manage authentication, confidentiality and data sharing.
Yes, cryptocurrencies can be used for good too
After inflating with 79,600,000,000%, the Zimbabwean dollar became completely useless as a currency. Imagine prices in the supermarket doubling every single day. The government was printing money in response to its economic problems and increased debt. This worsened the situation, and then the government printed even more money. As a result, Zimbabweans lost their savings, couldn’t afford basic goods, the unemployment rates hit 80%, and the country lost its own currency. The famous 100-trillion bill is now more valuable as a tourists souvenir, rather than as a store of value.
For many Zimbabweans and citizens who can’t trust their governments, bitcoin is a safe haven. And for two billion citizens around the world that are unbanked and can’t afford access to formal financial services, bitcoin and other cryptocurrencies have a true potential to provide a solution for financial inclusion.
The technology of trust
Ten years in, the blockchain technology is still in its early adoption phase. But the technology has proven its ability to transfer value or information in a transparent, traceable and tamper-proof way and within minutes, even seconds, instead of days. Many people who have heard of cryptocurrencies still have no idea what blockchain is. But a decade from now, it could be like the Internet. And we could be wondering how we have lived without it.