By David Drake
Although blockchain technology offers significant improvements to the current centralised systems, it has made small strides in the mainstream economy. Critics believe that this paints a grim future for the technology as it has been nearly 10 years since the technology was first created.
Despite such views, the Massachusetts Institute of Technology (MIT) predicts that utilization of blockchain technology will become the norm in 2019. But for William Davis, Managing Director at LDJ Capital, the culture that blockchain promotes is more critical than the technology itself.
He says, “Perhaps more important than the technology is the culture of transparency, immutability and personal data ownership which will create opportunities for option retail shopping with targeted marketing that is content rich and requested as opposed to intrusive and very often not desired. Pattern recognition from anonymized data will bring quick insights with real time pattern recognition of product launches, sales growth and failures.”
In a tech article published in ‘The Review’ magazine, institute confirms that many innovative projects are still in the pipeline, with some close to completion, thus, several large corporations from different business sectors have plans to roll out blockchain-based projects this year.
1. The Financial Sector
If 2019 will be the breakthrough year for blockchain technology, the financial sector is likely to be at the forefront of mainstreaming this emerging technology. This is because when blockchain was created, this sector was the obvious choice for mainstream disruption of the technology supported Bitcoin.
In mainstream finance, blockchain will ensure mandatory reporting and compliance with set obligations for banks and other financial agents. Using blockchain, players in this sector will benefit from reduced time lags that currently characterize the clearing and settlement process.
Even so, due to a largely non-receptive banking sub-sector, it is expected that the breakthrough witnessed with blockchain so far will be from the financial markets owing to the growth of digital assets. Some of the corporates that will propagate blockchain use in the sector this year include the Intercontinental Exchange (ICE) which plans to launch its digital asset exchange.
2. The Supply Chain Management
The supply chain sub-sector has grown exponentially since trade crossed national borders. This growth has created challenges in the sector, especially for food products as was evident in 2018 when retail stores like Walmart made recalls as a result of E-coli outbreaks across the country. Integration of blockchain in the supply chain space will help address such challenges and made them a thing of the past.
In supply chain pilot tests, the distributed ledger technology reduced the time taken to track food products to points of production from seven days down to a mere two seconds. Such breakthroughs will go a long way in reducing wastage and improve food safety for consumers. It is for this reason that Walmart instructed suppliers in its leafy greens supply chain to use its blockchain-based system. All all other food product suppliers are expected to adopt the system by September 30th, 2019.
3. The Legal Sector
Status quo necessitates third party involvement in contractual agreements. This increases the cost of legal services for those who need it. In 2019, there is a high likelihood that players in this sector will start to mainstream blockchain in contractual agreements, thanks to smart contracts.
An example of legal contracts that are taking shape in 2019 is the use of Chainlink, a blockchain startup that uses secure and decentralised smart contracts. In the open law project, Chainlink is partnering with Rocket lawyer to develop smart contracts that will allow users to create their own legal documents and automate payments as per the contracts entered into.
The increase in numbers of practical blockchain-based innovations to solve real challenges is likely to make MIT predictions a reality.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.