Most of the media’s headlines around blockchain technology center around the outsized performance (and then underperformance) of cryptocurrency, which closely resembled a roller coaster as Bitcoin gained 1,390% in 2017, up as much as 1,935% when it hit a record high of $19,666 in December 2017, before crashing back down to earth in 2018 and settling around $3,400 in January 2019.
After the collapse of Bitcoin and the carnage and extreme volatility experienced by its peers and rivals, fueled by rampant speculation and hype, the growing consensus of business leaders and entrepreneurs is that the future of blockchain will need to be about a lot more than cryptocurrency.
Blockchain technology will soon impact every major area of business, and we are already seeing this revolution happen right now.
Here are three ways blockchain is changing the way we do business.
A blockchain is a continuously growing list of records, called “blocks,” which are linked and secured using cryptography. By design, blockchains are resistant to modification of data. A blockchain can serve as an open, publicly-distributed ledger that records transactions between multiple parties efficiently and in a verifiable and permanent way. Made possible by the public blockchain or distributed ledger technology, smart contracts allow the performance of transactions between anonymous parties, without the intervention of an intermediary or any geographic limitation, in a way that is traceable, transparent and irreversible.
According to a report by PwC in 2017, 55% of respondents are planning to adopt blockchain as part of a production system or process by 2018, and 77% by 2020, with the most likely use cases in Payments Infrastructure, Fund Transfer Infrastructure and Digital Identity Management.
Clearing and settlement processes are another area of FinTech ready for innovation. IBM and CLS, the largest provider of settlement and risk mitigation services for the global foreign exchange market embarked on its first blockchain project involving the bilateral payment netting of foreign exchange trades in more than 140 currencies for buy-side and sell-side institutions. According to Bob Greifeld, former CEO of Nasdaq, “I am a big believer in the ability of blockchain technology to effect fundamental change in the infrastructure of the financial services industry. Clearing houses are a wonderful invention, but if you have a public ledger that is trusted, you can evolve back to a bilateral (trading) world but proceed with instantaneous settlement. We currently settle at T+3. Why not settle in 5-10 minutes?”
Wall Street, traditionally risk averse and competitive between and among its various disparate constituencies, are slowly, but surely, moving toward a digital future that has blockchain at its very center.
Artists Rights, Licensing & Authenticity
Eastman Kodak, founded 129 years ago, struggling to compete in a digital age when smartphones have largely supplanted cameras, is finding a way to reinvent itself with its new blockchain venture. The KODAKOne image rights management platform will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. The platform allows participating photographers to take part in a new economy for photography, secure payment for licensing their work immediately when sold, and offer their work on a secure blockchain platform.
London-based startup JAAK recently announced its blockchain-based KORD system for managing intellectual property rights by connecting identifying information across labels, publishers, PROs, songwriters, and their representatives. Partners in the pilot program include BMG, Global Music Rights, Outdustry, Phoenix Music International Ltd, Sentric, Warner Music Group and Warner/Chappell Music. Users can connect to a shared data network utilizing the Ethereum blockchain, with the ability to insert, update, and remove their own information. This blockchain-based effort would create a public rights database and an immutable audit trail.
In the highly fragmented art world, collectors, dealers, auction houses, and the artists themselves struggle with assuring provenance and authenticity of priceless antiques, fine art, and collectibles. Intaglio, a New York-based blockchain startup led by a team of experienced entrepreneurs, is aiming to change that with a unique blockchain solution to record authenticity and track provenance by verified entities. “Intaglio has boldly put itself on the front line as blockchain surges into the art world. It does not just apply modern technology to age old problems, it invents new technology to solve them with trust and sustainability,” explains Nicholas Dawes, VP Special Collections, Heritage Auctions, the largest collectibles auctioneer and third largest auction house in the world, as well as the largest auction house founded in the U.S.
IT & Cybersecurity
In the wake of a series of highly publicized data breaches at Yahoo, Equifax, Target and more, involving hundreds of millions of names, addresses, birth dates and more, companies of all sizes are increasingly focused on protecting networks, computers, programs and data from attack, damage or unauthorized access.
MATRIX AI Network, a global open-source, public, intelligent blockchain-based distributed computing platform and operating system has developed a Secure Virtual Machine to detect attacks on transactions by providing AI-backed vulnerability detection with fault-tolerant protocols. In other words, by merging blockchain technology and artificial intelligence, the MATRIX team has introduced formal verification technology during transactions to detect security vulnerabilities and even rollback a compromised transaction to its prior state. While this innovation has obvious advantages in the opaque world of cryptocurrency transactions, where fraud is rampant and can easily go undetected, it has potential far beyond the blockchain.
David Schatsky, Managing Director at Deloitte U.S., sees the potential for blockchain technology to help revolutionize the 122 billion global cybersecurity market, noting that “the technology provides a way of recording transactions or any digital interaction in a way that is secure, transparent, highly resistant to outages, auditable, and efficient.” It is these features which form the bedrock of an effective cybersecurity system and is now attracting the interest of companies like Lockheed Martin and even the U.S. military for protecting critical intellectual property and national security.