“The only constant in the technology industry is change.”
-Marc Benioff (CEO of Salesforce.com)
We are always amazed to see how technology is breaking down the traditional business sectors. The rate of advancements in technology has been exceptional in the past few decades with the sudden rise in electronics and information technology.
Many of these advancements became the driving force behind economic growth during ’90s. This defined the transition from manufacturing and commodity-based economy to a service based tech-driven economy which in turn led to coining a term – “new economy”. Mostly the idea behind this term came as a result of the sudden rise in speculation around the technology sector at that time, where the rise of the World Wide Web and related technology were so prevalent.
In an investor’s terminology, this period was known as “tech bubble” or “dot com bubble”. Although this boom in the global economy is said to have collapsed in the early 2000s, we can see it even now as it’s still on the horizon – in the form of many new exponential subsectors in tech like Artificial Intelligence, robotics, Blockchain, 3D printing and so on. Among these, Blockchain has to be placed in a different rack from others as it isn’t merely a cool technology, but a solid economic system.
Is Blockchain just a fad or an exhaustive system?
University of Nicosia, CEO Antonis Polemitis considers the evolution of Blockchain as a revolution just like the internet. He says “This is an industry that we think that over several decades will be as revolutionary as the internet. We’re going to have several million people working in this industry, if not tens of millions”.
Blockchain has a structure of an economy, rather than being just a technology. It has a fiscal policy defined by block sizes, taxation process in the form of fees, defense mechanisms by modern security protocols, governance/upgrading that represents the voting process and a strong monetary policy defined by inflation levels. And most importantly, it won’t be affected by the problems due to the concentration of power, thanks to its decentralized bookkeeping structure.
What’s So Special about Blockchain from Other Public Ledgers?
Distributed Ledger is a large database shared and synchronized across a large network. The blockchain is a type of distributed ledger in which the data is stored as blocks and the blocks are chained in the append-only mode. For simplicity, blockchain can be considered as a Google Spreadsheet where everyone who has access to it can make changes. But, the unique thing about this is, each of such update is final. And, there’s no way one can alter the record. This “digital immutability” enables the members of a Blockchain network to trust the data whatsoever. It eliminates the need for verifying the transaction which in turn results in improving the overall time and money. An interesting thing to note is that the number of people who are actively participating in this technology is increasing exponentially adding new breakthroughs into it.
Are Cryptocurrencies and Blockchain are the same?
The blockchain is the core technology where Cryptocurrencies plays as part of the ecosystem. These currencies are basically tokens used in blockchain network. These tokens can sell, invest, trade and can perform many other financial transactions within such a network. In an investor’s terminology, a cryptocurrency is a digital currency secured with cryptographic techniques. As it’s not issued/regulated by a central authority, governmental interference is not practical at least in theory.
Smart Contracts (Self –executing contracts)
Simply, it’s a computer protocol intended to digitally enforce and verify a contract performance. Here, contracts can be stored in digital format for utilization of computer networks running blockchain technology. It’ll help us to trade money, shares, property in a blockchain system without the help of a middleman; just like using a vending machine. As a traditional contract does, it can describe the rules & penalties surrounding a contract. Additionally, it can strictly enforce the obligations which a traditional contract may fail to perform.
Why Would Experts Say – Blockchain Will Create a Disruption?
It’s truly evident from the basic structure of blockchain infrastructure – a complete decentralized ecosystem that challenges today’s economy as an innovative revolutionary model. This distributed ledger can be managed by many people at the same time. But there won’t be an owner or controlling authority to this ledger.
There is a pivotal thing that enables Blockchain to be an upper hand over today’s currency system. Usage of our traditional currency is limited as just a utility to the current economy. This limitation can create problems when it has to be exchanged for other value forms. On the contrary, digital crypto tokens can be programmed with a set of rules and these rules will become applicable at the time of exchange. For instance, we program the token so as it can’t be exchanged for grocery stores known for malpractices. Thus, these tokens can add up to provide social values as well in addition to being a trade utility.
Will Blockchain Cause Heavy Layoff in Industry?
It’s assumed that Blockchain will eliminate many back-office functions existed in many organizations – especially in the financial sector. At the same time, Blockchain programming itself is becoming a hot career choice among tech aspirants.
In Upwork.com, Blockchain was the 2nd most demanding skill in the freelance market at the beginning of 2018.
There’s Still a Long Way to Go
Obviously, blockchain is gaining a considerable boost in the FinTech sector, there’s a visible delay in consumer adoption. It could be because of the lack of enough infrastructure that can support this kind of disruptive technology. For example, consider a bank. In today’s scenario, such a financial institution will be highly regulated and for bank officials, transactions like the exchange of crypto tokens will be riskier than the stock market. Same in the case of manufacturing firms. And, the blockchain is unlikely to work with communities with less reputational information.
Anyhow, there’s no question in the fact that blockchain and its related technologies can deliver exceptional technical performance including data integrity & availability. Efforts have already been made by many enterprises to build a blockchain infrastructure suitable for their needs. It’s a wise decision for organizations to keep an eye on the development happening in this field so as they can take advantage of the early adoption.
Let’s keep an eye on the upcoming developments in Blockchain technology that may bring the revolution!