The irony of going online to read “Why the Internet Will Fail”, published by Newsweek in 1995, about the shortcomings of the Internet and why it will inevitably fail should not be lost on anyone. Modern Luddites may say they’re too volatile, or that they’re too risky, or their implementation and startup costs are too high, but the fact of the matter is, similarly to the Internet, distributed ledger technologies, or the blockchain, are here to stay and they are going to change the world. 2017 may have been the year of the cryptocurrency, but 2018 is shaping up to be the year of the blockchain.
Just as the Internet exploded in popularity and legitimacy in the early 1990s, excitement over the countless practical uses for blockchain is expected to spread also as we continue to learn about and implement this technology. Even more importantly, as Kurzweil’s Law states, “technology is a process of creating ever more powerful technology using the tools from the previous round of innovation.” Essentially, the amount and rate at which technology will advance will only increase exponentially as we continue to innovate, implement, and improve upon the blockchain. This technology will the next big leap forward in increasing productivity.
We stand at the precipice of the next, great chapter of the Information Age. So, what should the modern consumer or C-Suite executive do in response to these technological advances? Embrace innovation and explore the potential benefits. You may not work in a technological or digital, data-driven industry, but scores of blockchain-based pilot programs across countless sectors are being initiated. Here are a few stand-out examples of where blockchain implementation could revolutionize how business is done in these industries:
- Real Estate
A distributed ledger can be created to share and maintain databases and processes. One key use for blockchain in the real estate industry is through the multiple listing service (MLS), which is the industry-wide tool used to track what agents represent which clients, contracts, listing agreements, and much more. Rather than using the outdated, inefficient, and restricted MLS system, imagine using an industry created, shared, nationwide blockchained database. On another note, Michael Best Strategies’ (MBS) Blockchain & Cryptocurrency Daily Clips has been closely following Cook County, Illinois’ experiment with distributed ledger technology’s ability to improve upon transferring and tracking property titles. Rather than receiving the paper deed, Cook County is looking to become pioneers in replacing those deeds with digital tokens. Finally, when it comes to finalizing transactions, blockchain technology can bring about vast improvements to the industry. As is always the case in real estate, all that ever matters is “location, location, location.” But what if two parties are not in the same location – on opposite sides of a country, for example? As we’ll discuss in the smart contracts section below, contracts powered by the blockchain can improve speed, trust, and efficiencies in the industry, and reduce consumers’ costs.
- Smart Contracts
With blockchain technology, a new way of conducting contractual business is beginning to emerge that will eventually be utilized by all industries. Following the trend and popularity of decentralized activities, utilizing smart contracts will eliminate third-party costs – ‘the middlemen’ – shrinking costs and improving efficiencies. A contract between two parties could be written as code into the blockchain, in the form of a token, and then a triggering event, such as an expiration date or a strike price being hit, would automatically execute the contract according to the terms of the contract that were in the code and another token would be added to the ‘chain’ of ‘blocks’ that would signify the contract’s execution. For reference, a token is a cryptographically secure unit of value that an organization creates to self-govern its business model and resources, and empower its users to interact with its products, while facilitating the distribution and sharing of rewards and benefits to all of its stakeholders. An additional bonus to smart contracts is that regulators could use the blockchain to monitor and understand market activity, and more efficiently regulate those entities within their purview.
There are a number of exciting developments for blockchain in the healthcare sector. Researchers from Harvard launched Nebula Genomics to connect individuals with data buyers in an effort to eliminate the middlemen in the process of buying and selling personal data. Specifically, Nebula gives individuals the opportunity to grant a pharma or biotech company access to their genetic data for the purposes of research. If you’ve ever read the hit, bioethical book, The Immortal Life of Henrietta Lacks, this is an incredible advancement for the industry. Blockchain could even save lives. Pharmaceutical, biotech, and healthcare companies already create serial codes for their products but if these entities utilized blockchain technology, we could see a world where medicines and medical equipment are tracked and traced much more quickly and accurately. Technology can cut costs, build trust by verifying product quality through tracking the supply chain, and eliminate error-prone data from being used to make business and patient decisions. Accenture is working to establish such a system. Currently, over 7 billion unique serial numbers are being tracked and over 1,500 transactions are occurring per second within the Accenture model. These increased efficiencies could save countless lives that depend on the legitimacy and the quality of the medications patients use, as well as the speed at which they are delivered.
The shipping industry, a notoriously paperwork-laden sector, could achieve dramatic efficiencies by utilizing blockchain technologies. Of course, the benefit smart contracts could bring to the field have already been highlighted, but blockchain could bring quicker processing times and real-time updates on materials being shipped, increased accuracy and fewer errors through automated processes, full supply chain transparency, and saved costs that would benefit both the shipper and the consumer. Two of the world’s largest shipping companies, Mercuria and Maersk, are already taking steps to implement blockchain technologies. It will be exciting to witness the productivity improvements that blockchain will bring to this industry sector.
These are just a few industries that illustrate how blockchain technology will change the way the world conducts business. While it is in its infancy, the potential applications for distributed ledger technologies are endless. It is here to stay and will change the way the world operates.
One final observation: By age group, millennials are now the largest population group on earth. This tech-savvy, distrusting, decentralized-focused generation of consumers will drive demand for more efficient products and services at the lowest cost. Blockchain is the technology that will enable industries to meet their demands.