In 2016, I hosted some NRI Guests in my Homestay, and back then he said, his business is Cryptocurrency. He did ask me if I knew anything about Cryptocurrency? I nodded, YES, but not so firmly. The fact was, I had no clue about this term.
The Bitcoin( the top cryptocurrency today) was $435 in 2016, and today in Aug 2021, it stands at a staggering $49062. Today, when I think of cryptocurrency, I can only think of its growing massiveness in the years to come.
Blockchain Technology, the backbone of cryptocurrency, will disrupt most of the existing frameworks and hold the potential to change the world as we see it now. According to Garter, a global research and advisory firm, blockchain will generate annual business of a value of more than $3 trillion by 2030, and 10% of the world's economic structure might be running on the blockchain.
We will be moving ahead from the ' internet of information ' to ' internet of value,' where the trust levels are being taken care of, and the trust levels are higher than ever before. The industries will get the brunt of the disruptions to rely on intermediaries, banking, finance, real estate, insurance, legal, healthcare, and many more, which we can't foresee now.
Have the banks started working on blockchains?
Well, yes! They have no choice, the sooner - the better for them! As per the reports available in the media, the banks are exploring various uses of blockchain in their area at their innovation labs.
DBS Bank had even organized a blockchain hackathon in Singapore in 2015. A hackathon is always aimed to caret functioning software/hardware by the end of the event. There were winners announced in the hackathon.
Banks are working with Tech Giants like IBM to take their systems on the blockchain not to be left behind. Most of them have realized that this would cut costs and improve the transparency of financial transactions, making the transactions even faster.
Blockchain technology has its uses beyond the financial service industry. Since the blockchain is related to cryptocurrency, the use of this technology is not to be misunderstood as limited to the financial sector. The non-finance players are also making use of the opportunity that blockchain technology holds for them.
Let me bring out some of the applications of blockchain technology in addition to the crypto world-
Smart Contracts
Smart Contracts was first used in 1997 by Nick Szabo, a computer scientist, law scholar, and cryptographer, long before bitcoin was created. He was keen on using a distributed ledger to store smart contracts.
The difference between a conventional and smart contract is in the latter's being completely digital. Meaning, a smart contract is an immutable and distributed computer program that is stored in blockchain. Being immutable means, once the smart contract is created, it can never be changed again. No one can tamper with the code of your contract.
And the distributed smart contract means that the output of your contract is validated by everyone on the network before execution. The smart contracts are unlike pages over pages of legal documents, where you sign at the bottom /on each page with the date. At the core, smart contracts perform three functions- store rules, verify rules, and self execute.
The banks can use smart contracts to issue loans or offer automatic payments; The smart contracts can also be used by Insurance companies who can use smart contracts to process claims. The postal/logistic companies can also find the use of these contracts for payments on delivery.
There are blockchains, the biggest one being Ethereum which was specially created and designed to support smart contracts programmed in a special programming language called Solidity.
Having physical/intellectual property records on the blockchain is also being viewed as an area where blockchain technology can play a vital role.
Cross Border Payments
As one of the applications of the blockchain, cross-border payments are going to be faster and simplified. But the governments worldwide are considering cross-border payments through the blockchain as an easy path of funding terror groups to escalate terrorism.
But the point that we are missing out on is TRACEABILITY. We can trace each transaction on the blockchain. Now, which terrorist group in the world would like to use a system of payments where the change of hands of money are clearly traceable.
Blockchain not only reduces the cost of transfer of value by 2-3% of the total amount, but it also provides guarantees and real-time transactions across borders.
Are the Blockchain-based companies already existing?
Some companies are purely blockchain-based, and some are just start-ups, very much in the initial stages of embracing the technology.
These companies are providing cryptocurrency exchange platforms, secured banking operations,gaming,E-commerce,lending, digital media ,journalism ,healthcare,artificial intelligence ,identity management,digital tracebility,credentials,clod computing platforms,supply chain, internet of things(IoT),logistics, insurance,cybersecurity,aerospace,defense and automotive to list the noted ones.
Blockchain islands- hope you have heard of them?
Malta is the first country in the world to issue education certificates on blockchain technology. This small country is also the first to become a blockchain island.
While several countries are not gathering enough courage to adopt blockchain technology and cryptocurrency, Malta adopted a remarkably progressive stance towards blockchain technology by establishing the regulatory authority for cryptocurrency.
Malta wanted to become the blockchain island to establish itself as a crypto-economy giant, attract the world's largest cryptocurrencies by providing a suitable environment for blockchain businesses. The Maltese Government wanted to be the first to benefit from the burgeoning technology.
Malta does not have natural resources, and they are open to any idea that can fuel the country's economy. They have hosted several crypto conferences and blockchain summits.
Other countries like Switzerland, calling themselves a Crypto Nation, having Crypto Valley in Zug, are also moving in the same direction to take the share before others rise.
The Lucerne University of Applied Sciences and Arts in Switzerland offers short-term and long-term courses on blockchain technology and distributed ledger. Also, there is a blockchain hub called 'Trust Square,' which houses start-ups working in blockchain, cyber security, and artificial intelligence.
There is much more happening in this new technology each day, and nations worldwide who can sense the heat are bracing themselves to incubate...
The NEXT BIG THING !!
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