Innovations in technology boosting the blockchain market’s future and strategic value
Though it may not be as well-known as the many cryptocurrencies it underpins, blockchain technology will likely have a wide range of applications and ramifications in the future. The idea of money, labour, and amusement have all undergone a significant shift in the post-pandemic world and society as a whole. You might find it difficult to believe, but blockchain technology has the power to transform the way we manage our finances, our health, and how we pay for products and services. Here are some potential future changes that blockchain might bring about.
Permanent digital credentials
Imagine having a single digital platform that is accessible from everywhere and as secure as a home where you can store and validate all of your credentials, including identification cards, academic certifications, and driving licenses. This is what using blockchain technology makes possible. As a decentralized technology, blockchain makes it possible to create robust databases that are immune to fabrication, protecting, and storing crucial records. It’s likely that in the future, students, graduates, and citizens will be able to instantaneously authenticate legitimate diplomas and papers on their cellphones from any location in only a few clicks.
Smart Contracts Will Remove Middlemen and Cut Costs
Let’s first clarify what smart contracts are in order to discuss the why and how. These essentially function as blockchain-stored scripts that are launched in response to certain events. They are most frequently used to carry out tamper-proof agreements where the results are promptly communicated to all parties involved, reducing time and eliminating the need for any middlemen. For this reason, it is anticipated that smart contracts will be essential to company operations in the future. They will result in significant cost savings as well as an increase in the efficiency and speed of business operations.
Buying Cars on a Shoestring Budget
While it is currently not possible to purchase a car with bitcoin, this may change soon. Numerous advantages, like tokenized ownership and the potential to see your vehicle’s value rise if the crypto market rises, may come with buying cars using cryptocurrencies.
Improved Supply Chain Monitoring
Businesses may lower their administrative expenses while increasing transparency and traceability across their supply chain by utilizing blockchain. Organizations may use DLT technology to record information such as price, date, location, quality, certification, and other pertinent details for better management. For access to real-time data and to increase exposure, this information can also be used further.
The Banking and Financial Sector and Blockchain
Nobody disputes the significance of blockchain and DLT (distributed ledger technology) in the banking sector. In fact, the Reserve Bank of India issued a lengthy essay in February 2020 titled “Distributed Ledger Technology, Blockchain and Central Banks” that discussed the technology in detail and outlined its usage and significance in India’s banking and financial industry. Blockchain may change financial organizations in a number of ways, including by enhancing the client experience, streamlining processes, enabling speedier settlements, and improving transparency.
Cryptocurrencies in the Energy Sector
Although blockchain is most frequently associated with financial services, the networked infrastructure of the energy business is a good fit for its uses. In addition to enabling an unparalleled degree of openness, coordination, and information exchange throughout the energy spectrum, it can help eliminate the need for expensive middlemen. The usage of blockchain in the energy sector is unmatched, from enabling peer-to-peer electricity trading via smart contracts to the efficient administration of renewable energy certificates and electric car charging applications.
The Use of Blockchain in the Healthcare Sector
Healthcare providers may swiftly communicate data with one another using blockchain and DLT technology, which can reduce duplication and speed up diagnosis because healthcare deals with sensitive data and frequently needs immediate access to patient information. All at once, it provides access, security, scalability, and data privacy. The supply chain may be made transparent through the use of blockchain technology, confirming the legitimacy of medical supplies and fostering consumer confidence.
Easier Digital Voting
By encouraging the use of blockchain technology during elections, the public and the government might benefit from a significantly simpler election process. In the present system, voters must physically travel to polling places to cast their ballots, but what if they could complete the full voting process using a smartphone from the comfort of their homes? This is what using blockchain technology can accomplish. It can fully replace the requirement for paper ballots by enabling remote identity verification and tamper-proof voting.
Blockchain and the Internet of Things (IoT)
These days, IoT gadgets like smart devices and digital voice assistants are all around us. These sensor-based devices simplify our daily lives and assist us in completing chores. They are nonetheless vulnerable to cyberattacks because of their internet connectivity, which might result in the theft of sensitive user data and subsequent exploitation of it. Therefore, the use of blockchain and DLT technology for data encryption should be encouraged since it can assist in reducing these problems by making it nearly hard for cybercriminals to alter current data records.
Market disruptors with blockchain technology in the future
Encouraging a change in commerce
Somebody is now developing a blockchain solution to promote innovation and upset established business paradigms. This is happening throughout the majority of global countries and practically every sector. Indeed, the state of trade is evolving right now.
Understanding blockchain’s future via looking back
A typical middleman was created with the development of postal services (about 400 A.D.), which sparked an evolution in trade. Producers and distributors were given access to profitable new markets thanks to the dependability and control of a system to transport commodities across long distances.
Worldwide trade and communication were made feasible in the 1990s at speed previously considered impossible because of a massive, linked global network called “the internet” and a new program called “email.”
Due to blockchain technology, business frontiers are being stretched, and this intermediary’s position is evolving. As previously, we will all be riding together on this trip. However, to comprehend where it is headed, we must identify the two different sorts of organizations promoting innovation.
In this new ecology, who are the participants?
Looking past all the hype-driven headlines, the blockchain ecosystem is home to an interesting new cast of startups and innovators. Deloitte is observing an increase in less experienced entrepreneurs commonly teaming up with sector veterans to launch new businesses through our surveys and engagements.
These new disruptors approach blockchain in a different way than traditional businesses. Disruptors don’t change incrementally; instead, they radically alter how trade is made globally across all industrial sectors. On the other hand, due to their inherent limitations as significant corporations, legacy businesses are analyzing blockchain technology and willing to adapt, albeit more slowly.
In the 2019 Global Blockchain Survey by Deloitte, rising disruptors claimed to have implemented blockchain in production in 45 per cent of cases, compared to just under 25 per cent of corporate respondents.
Two paths split: One causes the development of trade
As might be predicted, many new disruptors are startups with the potential for quick experimentation and expansion. Those who have progressed farther in their concept development have shown tangible success in their markets by upending established enterprises.
By integrating new technology into their current operations, many legacy firms, in contrast, tackle blockchain from the other perspective and attempt to rethink traditional business models. Some firms fail to realize blockchain’s more significant potential as they focus on operational efficiency or a few use cases that generate income.
In either case, these businesses and the CEOs that run them have a lot in common: the capacity to acknowledge and even purposefully ignore—or not—the established standards of older business models. There is much to be argued for simply integrating the advantages of blockchain adoption into current measures, such as eliminating intermediaries, data that cannot be changed without a passkey, transparency for all participants, and near-real-time, frictionless transactions.
The people who design their solutions around blockchain’s promise are the true winners.
Use cases for blockchain
Future company practices will undergo a fundamental change thanks to business models offered by blockchain technology. Given the increasingly digitized global economy and the decentralization of business models and stakeholders made possible by blockchain, its effects on commerce will be game-changing.
An entirely new level of invention is waiting on this path. Here are a few instances of game-changing disruptors.
- Working smart contracts
At the moment, when a person purchases a ticket to a well-known Broadway production or rock performance, the stakeholders—artists, producers, and venues—get compensated when the original ticket is sold. Say the price was $200. The purchaser makes a $300 profit while these stakeholders receive no additional money if the purchaser later sells the identical ticket on the secondary market for $500.
Likely not for very long. Entrepreneurs are upending how internet transactions are handled by using blockchain technology. No matter how often their work is bought or repurposed, content producers will always receive fair compensation because of tokens and smart contracts.
With a smart contract, the parties to a transaction that involves services or intellectual property, such as a song or movie, may be identified as any other parties who could have rights in the transaction. Additionally, issuers can build rules into the maintenance, usage, and transfer of such assets using a protocol centred on digital assets, such as the open-source, decentralized Tari. Due to the immutability of blockchain, every transaction made throughout the asset’s lifetime complies with these specified restrictions.
Big Neon is an open-source mobile ticketing software that seeks to transform the ticket resale market for concerts and athletic events. Tari’s backers are developing Big Neon to showcase Tari’s possibilities.
- A new token economy
A startup by the name of Brave is leading the way in online advertising when it comes to the usage of blockchain-based validation protocols to verify and pay actual people who interact with online adverts as opposed to automated programs that act like viewers.
Why is this crucial? Because online advertisers now rely on the information given by specific site publishers to assess the effectiveness of their adverts. This information is employed to calculate how much to pay publishers for internet exposure. Given that a large portion of the data supplied to publications is fake, the existing model is untrustworthy and prone to errors. A crucial commercial issue is the employment of bots to see adverts instead of actual humans.
By developing a “smart” advertising contract, authenticating the data, and ensuring the advertiser pays the correct amount for the ad’s accurate viewing, Brave may significantly lessen this issue using its blockchain-based technology. An individual who clicks on a Black Friday ad for furniture, for instance, may provide the marketer with a glimpse into her online activity and other goods she was interested in.
The viewer may also be compensated for her time and attention by clicking on the advertisement with a “Basic Attention Token” that can be exchanged for goods and services. As a bonus, the issuing agency may learn more about how the token is used and identify potential new markets to advertise by tracking the receipt via the databases where it appears.
- solutions for digital identities
Solutions for digital identities provide users peace of mind while engaging with others online. Civic is a digital identification firm that provides identity verification services based on blockchain technology to assist individuals, corporations, and other organizations manage and safeguarding personal information.
To develop the first cryptocurrency beer vending machine in the world that uses anonymous age verification technology, Civic teamed up with Anheuser-Busch InBev in 2018. Anyone may access the Civic App and use Civic to verify their identity.
With that validated identification, the app user may scan a Civic QR code on the beer vending machine to confirm they are over 21 without disclosing any other personal information, such as their age or identity.
With the aid of Civic’s solutions, businesses and their clients will be better equipped to control who and where their identity information is shared. Civic users can store their PII in a single, highly secure account, authenticate their identity only once through trusted validators, and instantly provide authenticated data to requesting parties rather than sending Social Security numbers, private information, and other personally identifiable information (PII) to numerous parties (e.g., credit card companies, banks, health plans).
- Security through verification
Businesses like Rivetz Corp. safeguard authentication required for mobile transactions by bringing immutable verification to software that runs devices, offering cybersecurity in developing smartphone apps. As ID, payment, insurance, and loyalty programs become digital; device integrity will become more and more crucial.
In the emerging blockchain economy, according to Rivetz, the smartphone will carry the majority of private keys, making it a possible weak point in the system. The Know Your Customer (KYC) standards necessary for secure transactions will be validated by networks powered by blockchain technology, such as Rivetz’s.
Navigating the regulatory and other complexity
Innovative company models need careful consideration of the legal framework, industry standards, and strategy. Professional advisers must assess the applications of this emerging, inventive commerce using out-of-date norms and old playbooks.
The study of income tax, indirect tax, and payroll taxes is significantly impacted by whether cryptocurrencies are classified as securities, commodities, debt, inventories, or cash equivalents for tax purposes. States and countries have different views on this, and regulators’ perspectives continuously change. There is also little authoritative advice. Our world of barter transactions, made possible by tokens and cryptocurrencies, requires character assessments (capital vs. ordinary), basis monitoring of fungible assets, and character judgments.
The potential and difficulties presented by customers who have incorporated blockchain technology into their business operations and financial reporting procedures must be accepted by the CPA auditor in cooperation with authorities and standard-setting agencies. The capacity to automate regular audit processes might lead to more openness. Immutable data can, however, nevertheless be false or fraudulent information.
The CPA auditor may offer novel service offerings like blockchain platform assurance, digital asset validation services, and intelligent contract assurance in addition to conventional financial statement reviews and audits to corporate businesses and rising disruptors.
The giving, evaluating, and removing access controls to encryption keys or other system settings is one of the most important internal control areas. Access restrictions also depend on the proper delegation of power and the separation of conflicting responsibilities. Timely reconciliations between transactions recorded on the blockchain and those documented in the entity’s financial and tax records are another crucial aspect of internal control to guarantee the maintenance of sufficient books and records.
The job of dispelling blog hype, educating stakeholders, and discussing what blockchain does and doesn’t accomplish is currently being carried out by technology consultants. The discussions about what is “on-chain” vs. “off-chain” and how “tokenomics” needs to promote good behaviour are examples of new jargon.
As new protocols and platforms arise, it is necessary to rethink a suitable technology stack to bridge the gap between the technology’s current fledgling state and an enterprise-grade future. This technology stack is constantly evolving at both the core and the periphery. Even if creating a scalable blockchain solution is challenging, tried-and-true methods should continue to be considered.
- KYC/anti-money laundering (AML)
Authorities first viewed blockchain with a great deal of mistrust due to its role in enabling virtual currencies like bitcoin and its early links with dubious entities like Silk Road and the dark web. Cryptocurrencies’ intrinsic features of speed, cross-border capability, irreversibility, and pseudonymity, among others, generated fears that they will appeal to money launderers and others who violate sanctions.
It has been claimed that regulatory ambiguity over applying AML rules, such as KYC, has stifled innovation among ecosystem actors. Ironically, because blockchain serves as a trustworthy store for data, identity verification methods, and transaction logs, blockchain may be the best instrument for meeting regulatory requirements. One of the sectors being most significantly disrupted by blockchain is financial services.
Trends enabling blockchain’s future
As seen by innovations from businesses like Brave, Civic, Rivetz, and others, the frontiers of commerce are currently once again being pushed. These enterprises are assisting in the redefinition of business practices, trade, and consumer-business interactions. They are the pioneers of a new commercial evolution and the blockchain’s future.