Over the last decade, there have not been as many technological inventions that have received as much hype as blockchain technology has. Adopting the innovative technology is materializing in industries like banking, finance, law, insurance, and supply chain management to decentralize processes and improve security.
A survey from QPQC and Supply Chain Management Review shows that 80% of participants are familiar with blockchain against only 66% in 2019, with 48% saying their organization is likely to invest in blockchain technology during the next two years.
The truth of the situation today is that blockchain still misses key components that make it a fully rounded solution. However, CIOs must realize that blockchain technology is evolving, and missing the deployment train could leave them lagging in the future. Although it is vital not to fall foul of vendors claiming to have complete blockchain solutions, the technology cannot be ignored.
In this article, we will look at the current state of blockchain and what the future might hold for the technology.
The Four Phases of the Gartner Blockchain Spectrum
To help understand the future of blockchain technology a good starting point would be the Gartner blockchain spectrum. Source: https://www.gartner.com/smarterwithgartner/the-4-phases-of-the-gartner-blockchain-spectrum/
The spectrum offers four phases, each with its own opportunities and risks that demonstrate blockchain technology’s development path leading up to 2030 and beyond. To make sense of the stages, Gartner puts blockchain into the context of its five core elements, which are encryption, distribution, immutability, decentralization, and tokenization.
At this stage, the technology building blocks are created that will facilitate future blockchain solutions. For example, cryptography, distributed computing, or peer-to-peer networking are set up even if they are not active. The objective is to be blockchain ready.
A blockchain-inspired phase focuses on making existing processes more efficient or reengineering them. At this stage, solutions will include three of the five core blockchain components; distribution, encryption, and immutability. Tokenization and decentralization are not mature enough to work with blockchain yet. We are in a blockchain-inspired phase at the start of the 2020s, relying on maintaining existing processes and architectures. The current solutions often lack tokenization and are not fully decentralized.
Gartner predicts that by around 2023, blockchain-complete solutions will start to emerge. At this point, the technology will be capable of using all five of the core components necessary for blockchain success. The addition of tokenization and decentralization, which are lacking in blockchain-inspired solutions, will be the catalysts for creating new business models.
From 2025 and beyond, we will see blockchain technology incorporating other innovations like artificial intelligence (AI), the Internet of Things (IoT), and better connectivity such as 5G. This evolution will allow people to own, control, and share their digital and non-digital identities, using a means that is safe, traceable, and trackable.
Businesses will only get to enhanced blockchain solutions if they lay the foundations now.
The Next Ten Years
In the three to four years, there will be a few use cases that dominate blockchain applications. These are attempting to solve real-world problems. These applications may continue to lead the blockchain revolution for the next decade, but there are probably plenty of new ways to use the technology that don’t even exist yet.
When we talk about identity in the 21st century, it is far more than just your name and date of birth. The digital landscape means people can be identified with Facebook or Google logins, banking information, retina scans, fingerprints, and much more. Whenever somebody is online, it leaves a footprint of behavior that can be used as part of identity checks.
Governments and financial institutions are already looking at how blockchain can incorporate this information by leveraging encryption and tokenization. Imagine a world where you no longer need a passport as proof of identity because everything is stored within the immutable blockchain environment. Over the next decade, we expect some solutions to move into the deployment phase within this area.
There are still barriers around security with digital identity, but a complete blockchain solution should be able to answer those.
We have probably all heard of deepfakes by now. Going beyond fake news, a deepfake can edit videos or images, such as this Barack Obama speech, making them appear real. Blockchain can offer a solution to the deepfake problem. Verification on the blockchain can make information immutable and mean that it cannot be tampered with by those with malicious intent. It is a very attractive proposition for governments and those in the legal profession and one they will surely invest in.
The startup, Truepic, raised $8 million for developing their deepfake detection technology, which initially verifies photos on the Reddit platform. Truepic works by verifying an image has not been altered and adds a timestamp, geocode, URL and metadata. The server stores a version of the photo along with a six-digit code within an immutable blockchain.
Blockchain can bring a layer of trust back to the internet.
The future of cryptocurrency in the world economy is a debate in its own rights. As of today, cryptocurrency like Bitcoin is still very much a niche, with limited places to use it for transactions. With enhancements in blockchain technology, cryptocurrency has the potential to be a massive force in the economy, having the potential to replace paper money completely.
The top cryptocurrencies already boast a market capitalization in the billions of dollars. In the US, there are thousands of Bitcoin ATMs and Coin Kiosks, while companies like Microsoft will accept payments with digital currencies. Regulation might be key to the future of cryptocurrency as governments seek to find a consensus on how to categorization them.
Anti-Money Laundering (AML)
With blockchain technology, AML and Know Your Customer (KYC) processes can be safer and more efficient. When a commercial customer wants to complete a large transaction, the validation process can involve lots of documentation and interactions to ensure it is all above board. An immutable blockchain will speed up trade as all parties can verify transactions as part of a shared ledger. For the members of the blockchain, it adds further layers of security, while financial institutions benefit from a sharp reduction in the resource requirement to handle procedures.
New Blockchain Innovations
We will all be aware of the common blockchain use cases in finance, security, and cryptocurrencies. However, several new applications demonstrate that the use cases are far-reaching. Applications like those below are the future of blockchain.
Blok on Blok is the first smartphone powered by blockchain, using an operating system called Function X. The aim is to give users full control over the phone and how data is used, fitting in with growing concerns around privacy. All apps within the device are decentralized, and users can switch between blockchain and android modes. When in blockchain mode, you can make calls and send messages without a centralized service provider.
Open Index Protocol provides the first public space system for content distribution that does not need permissions, with a decentralized and transparent index. Open Index Protocol will enable open-source record indexing, file distribution, and storage, as well as transaction management.
IBM Food Trust
The IBM Food Trust traces the source of ingredients for every dish that is served. It works for digitizing transactions in food supply chains, meaning partners can securely share information and create a transparent network. In an industry that can be multiple tiers in terms of supply, deploying blockchain in this way will prove revolutionary.
Blockchain is evolving to be much more than a financial technology that is synonymous with cryptocurrency.
Who will lead the blockchain revolution?
Most of the G20 are devoting resources to blockchain solutions. In 2018, Dubai said it was aiming for a Blockchain Government by 2020, but it is unknown whether that has been achieved. The Smart Dubai initiative is a public-private partnership aiming to create a smart city with a seamless experience for citizens using blockchain technology.
The Australia National Blockchain has the objective of moving the nation towards blockchain immersion. Small and developing nations like Malta, Singapore, and Estonia are also researching digital identity, the Blockchain of Things, and regulation concerning blockchain technology.
Some industry leaders are forming blockchain coalitions to bring in the desired standards for further development. The Blockchain in Transport Alliance for supply chain management and the Blockchain Law Consortium for the legal industry are two examples trying to make an impact.
It is not impossible that sometime in the future, every business will be using blockchain. If you consider that it could remove the need for constantly changing passwords, checking documents, and reviewing transactions, the number of use cases is vast. As soon as technology can make life easier, it has the potential to become mainstream, and that is where blockchain will get widespread adoption.
There is a long way to go as businesses need to upgrade their existing models and infrastructures, as well as buy into the blockchain philosophy. However, there is an immense possibility that i6t could change the world as we know it.
Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltecbank.com.
The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group, www.deltecbank.com.
The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.
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