Chapter 3 – The Business of Blockchain
Everybody has trust issues with something in their lives. Many people today, don’t trust inputting their information into the internet. However, even with this mistrust, it hasn’t stopped many people from continuing to do it.
One purpose of blockchain technology is to help ease the distrust that people have with inputting their information on the internet and is one of the main reasons why companies are increasingly investing their money in the use of this technology. In fact, between 2013 and 2016, a study showed that blockchain- managed funds reached a total of $1.6 billion, which equates to a 1,600 percent increase.
Different Industries that Use Blockchain Technology
The financial industry is one of the sectors that have greatly benefitted from the use of blockchain technology. This is because of the vast sums of money and transactions that are in play in the industry. Here are a couple of examples of the different companies that are utilizing blockchain technology today.
Crowdlending campaigns have started to take over the act of having to go to the bank to get a loan. Crowdlending is a person to person lending company. Today, there are, on average, more than 50 billion person to person loans being made worldwide. This industry will likely feel an enormous boost with the use of blockchain technology.
IBM has become one of the major players in blockchain technology use, with a proven track record of being a great asset for tracing transactions. IBM’s Global Financing Unit processes $2.9 million in payables for the company every year. It is also responsible for granting credit to more than four thousand suppliers. IBM has been successful in lowering dispute settlements by 25 percent, thanks in part to blockchain technology. This decrease in percentage has resulted in the group being able to free up $100 million in pre-confirmed capital for other purposes.
The bookkeeping industry has greatly benefited from blockchain technology. Every transaction that takes place in the economy today is registered internally in the private records of individual market participants. Blockchain technology takes place when accounting expands past the borders of the network.
There are numerous ways that blockchain technology can add value to a business. One way is by building a network for your business. Dr. Michael Yuan, the Chief Scientist of CyberMiles notes how blockchain can provide value to startups and companies. His theory is that the key benefit of blockchains will deliver the ability to construct a network for all kinds of businesses. What his theory states are that rather than competing against each other, companies can collaborate and build a system with each business industry having its own chain.
Another way that blockchain technology can add value to a business is by banking the unbanked. It might be hard to believe, but there are a lot of people in the world who don't have bank accounts. Blockchain technology will provide the opportunity for these people to create a bank account. Someone could just open a bitcoin account and in return have a digital wallet.
A third way in which blockchain technology can add value to a business is by lowering the time for transactions to be complete. Again, time is playing a significant role in the blockchain world.
Christopher Brown, CEO of Modular, create Blossom, a digital wallet for Ethereum. The program is a multi-featured desktop wallet application that gives businesses and users a more straightforward way to handle their funds. It takes less time than if you were to head to the bank to get cash.
Next, blockchain technology can add value to businesses through legal contracts. This can be done by linking the Internet of Things (IoT) data and blockchain technology. Utilizing the data from IoT devices allows individuals and businesses to connect to legal contracts that have been saved on the blockchain. For example, when you are buying a house, all the documents that you sign, must also be signed by the seller. This means that all the documents must be in one place for both parties to have access. Outside information from IoT connected devices is linked to the blockchain, making the legal contracts immediately usable without anyone being able to interfere in the process.
The final way that blockchain technology can add value to a business is by helping with monetization. The ways companies are making money are changing. People no longer pay attention to ads because you can now fast-forward through the commercials and online they can be ignored. Plus, the money generally goes to the site where the ad is placed, which has a tremendous impact on business.
Blockchain technology solves this problem. This is because every part of the content that is created for ads is recorded on the blockchain, which is how content creators are rewarded through cryptocurrency or fiat currency.
Many experts believe that blockchain technology will become the way of the future. Cryptocurrency is rapidly increasing because people want to put their money in a place that is not only safe and secure, but that will also gain value like a savings account.
However, savings accounts aren't as secure as they would like. By the end of 2017, future markets had already been created for bitcoin. That was also the year the finance industry saw a dramatic increase in Initial Coin Offerings, (ICO). In the last year, ICOs have gained more money than venture capital investments.
While cryptocurrencies continue to improve in their abilities to quickly process transactions, eventually they will compete against credit card companies processing of transactions.
At some point, everyone has used the cloud to back up data that they don't want to lose. If you didn't know, the cloud actually runs on a blockchain. Experts say that we have started to take luxury for granted. In the past, you couldn't merely click a button and automatically save data to a backup site like iCloud or OneDrive. Instead, you were required to transfer the information on a compact disk or flash drive. Then, you would have to take the disk or flash drive to another computer to download the data.
While you can still do this today, there isn't a guarantee that this type of technology will last. Like the floppy disks of the past, compact discs and flash drives may become obsolete, but internet saving applications will always be updated because we now live in a tech-savvy world.
eSports and online fantasy sports have grown significantly over the last decade with more and more people creating online fantasy sports teams. Online games, like Fantasy Football, were some of the first sites to adopt the earliest versions of bitcoin and other cryptocurrencies. They also use blockchain technology to run and keep up with the gaming technology.
The uses of blockchain technology don't just stop with fantasy sports. The most popular smartphone applications to download today are games. This is why, as the technology grows, more developers will likely make use of blockchains, as well as cryptocurrencies.
Supply Chain Management and Blockchain
Blockchain technology will also benefit supply chain management by providing a way to trace goods while at the same time being cost effective. For example, sending packages through the United Parcel Services from one business to another. In the past, someone had to call to find out where their box was if it hadn't arrived when it was supposed to. Today, you are provided with a tracking number that allows you to see where the package you sent or are waiting for is in transit, which creates a blockchain.
Blockchain technology has made it easier for businesses to do business together because it has dramatically simplified the production process, and transfer process, as well as the verification and payment methods, used.
Blockchain Technology and Quality Assurance
In business, mistakes happen, no matter how careful you are and how closely you follow processes and procedures, and it can be challenging to pin down how the mistake occurred. With blockchain technology, mistakes and errors can be traced back to the point of origin. Not only does this make it easier to investigate mistakes, but it also saves companies time and money.