Blockchain upbringing a New Digital Economy in the year 2019
Over the years, communication and transaction costs have drastically declined because of the advent of cheaper internet services, which has brought up new platforms meant to deliver goods and services at effectively higher and efficient speed than ever. These changes in the underlying technology led to the growth of new digital players who are consistently challenging the business models and reforming the pre-existing value chains through online reputation and feedback systems. This helps to create global marketplaces where individuals, products and services could be matched more effectively than ever before. By providing curation and ensuring the safety of transactions, these new types of intermediaries have been outperforming the competitors and bring rewarding talent, ideas, and capital, thereby, reaping the returns of this first wave of digitization.
Further, to assure the success of any venture, it’s necessary for it to adapt to the ongoing technological transformation that allows intermediaries to add value to transactions, while some established players have already started to use this opportunity to scale their operations further, others are challenging new entrants proposing entirely new approaches to value creation and value capture.
One such technological interface brought is the Blockchain. It is a shared database offering a decentralized registry of authority and defining an individual transaction in the system from the creation of a block and through any number of transfers made.
In this whole process, computers patted into the system store a copy of the Blockchain. Before a transaction, the computers execute a system check to ensure that their version of the Blockchain is in sync with all other versions within the network, thereby, creates a perfect bonding between two concealed things without the intrusion of any third party which acts on nodes.
In 2019, it is important to obtain the full power of blockchain technology which will change the world of ‘Digital Economy’ and also have diverse applications in other various fields. Also, there will be numerous enterprises which could benefit from enhanced security, safety, transparency and the removal of redundant mediators. Here in this context, we are going to discuss ‘How Blockchain technology will change the Digital Economy in the year 2019 and further’.
Features of Blockchain Technology
Blockchain technology is made of an algorithm that lessens the confirmation required for online transactions in past years. It has emerged as an anonymous tool that safeguards the identity of users. Let’s have a look over the extensive features of blockchain technology that have gained a lot of applauds worldwide.
Enhanced size and space
The ever-rising demand for Blockchain across all sectors will make it more flashing and more spacious in the year 2019. With more space for more data almost at every stage of the transaction, allowing it to process thousands of financial transactions every second throughout the world. Thus, this year, it is expected that technologists will improve its speed and performance.
The massive growth and rising popularity of the blockchain market attracted thousands of new investors over the past few years. A large proportion of these investors are drawn to the potential gains without being completely aware of the aspects of this technology.
Newbies will often buy into an overpriced market, so Blockchain technology is one of the best existing options for the newbies to invest its capital. That’s why it is expected that spreading awareness towards Blockchain technology, and the digital economy will be most benefited.
The convergence of the Internet of Things and Blockchain
IoT is supposed to be all about transactions, contracts, and liability in a spread environment. The convergence of Blockchain and IoT is viewed and efficiently leveraged for multiple causes. It ranges from smart contracts and IoT data monetization models to mixed chains of connectivity where trust is a crucial thing assumed to be existing.
Complementing Artificial Intelligence with Human Intelligence
It has observed that the growing complexity and interdependency among the organizations along with increasing demand over the specialization needed to advance the technological frontier. It has made human abilities a critical bottleneck in the generation, processing and diffusing of real-time information.
To recount this trend, the people are consistently working towards upbringing better technology, governance, and contracts to simplify decision making, and ultimately allowing organizations to scale across different markets.
Looking over the technical side — artificial intelligence holds great promise in effectively reducing the cost of prediction. This leaves human opinion as for the last barrier before full automation; further, we already have the technology to harness, select and reward decision making at scale because of digital currencies.
Considering some of the best examples, we have firms bringing crowdsource ideas and solutions (eg, Innocentive, TopCoder), source talent provider (eg, Upwork), service provider (eg, Uber, Lyft, Airbnb), and capital provider (eg, Kickstarter, AngelList) relying over the traditional platforms to aggregate the intentions of the crowd, source expertise and redistribute returns.
Furthermore, to give hope to these markets, incentives and labour-intensive human judgment are required to be brought back into the picture. It is to ensure the effectiveness and building the reputation, where payment and curation systems for exchanges to take place safely.
How Is Blockchain bringing a New Way to Scale a Global Platform?
To understand the amendment brought by blockchain technology, it is effective to start from its most significant implementation to date; Bitcoin. Bitcoin is though criticized for its inability to match the performance of existing payments networks and the expectations of the financial system, the reality is that Bitcoin is exceptionally successful at allowing a global network to securely transact and exchange value without the need of any third party which proves to be costly.
Further, the original mix of game theory and the digital graph has allowed the Bitcoin network to reach the consensus about the true state of its distributed ledger at regular intervals. While the energy and computational waste associated with this network are criticized, it is precisely the sunk computational cost (proof-of-work) that secures the Bitcoin ledger from an attack and minimizes the extent of trust parties have to place in one another when transacting, mimicking many digital features — including the special ones — of cash.
Furthermore, Bitcoin recreates the financial system’s ability to transfer value without many of the tasks and costs typically involved in running and securing traditional transactions.
Another thing worth being considered is the marketplace brought up by the digital-tokens (e.g. Ethereum, BTC, etc.) that has established itself as one of the new types of organizational form, that resembles a spot market in its decentralized and incentives-driven nature, bringing up more complex forms of governance used in a traditional corporation.
While most of the existing firms are being tempted to adapt to the blockchain technology due to its splendid features like lower costs, standardized interface and architectural nature, while others are seen to be trying to preserve the current competitive structure of their industry and the value of their complementary assets, incumbents, failing to realize the significant role of the digital-tokens in upbringing a radically novel approach to value creation and capture.
For example, smart contracts, which is though in their primary stage of development, can add nuance to the transactions performed on top of digital currency. This helps in opening doors for new types of agreements and exchanges that benefit from substantial economies of scale to match the supply and demand of capital, talent and ideas.
A New Digital Economy coming in the year 2019
Blockchain’s finest application, Digital-tokens, is associated with a reduction in two fundamental costs: the cost of upholding the transaction attributes that can be recorded on a blockchain and the cost of networking. For the smooth functioning of a market, critical attributes of the individuals, firms, goods and services involved are required to be verified and audited before and after transactions take place.
This entire process is often labour-intensive and requires a third-party to ensure market safety, which can be cheaply implemented over a distributed ledger. Contrary to this, Blockchain possesses the time-stamping ability and immutable nature, which fits well into incumbents’ value chains as they allow for reductions in costs through cheaper forms of settlement and reconciliation.
Although Blockchain technology is commonly associated with Bitcoin due to which there have many applications that go way beyond digital currencies. Bitcoin is only one of several hundred applications that use blockchain technology today. If we are creating blockchain applications, then it has needed a mixed background in coding, digital graph, computation as well as significant resources.
Earlier unimagined applications, from electronic polling & digitally recorded capital assets to regulatory compliance & trading are now actively being developed and deployed faster than ever before. By providing developers with the tools to build decentralized applications, Ethereum which is now a thriving developer community is believed to emerge as the largest blockchain developer ecosystem making all of this possible which is also expected to do same in the year 2019.
Thus, there are many blockchain applications in the context of the Internet of Things, and some vendors have distinct solutions to facilitate the use of Blockchain for IoT too, among others enhance trust, which save costs and speed up transactions as well. So, this convergence of both these are unique, so we can say these are going to boost up the digital economy in the year 2019 and further.
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