Financial Services Is Only the Start for Blockchain’s True Societal Impact

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This opinion article is penned by Steven Boyle, CEO at Integrated Cloud Solutions, a Glasgow, Scotland-based software solutions firm.

Many new technologies have been touted as the next big thing – the disruptor to end all disruptors no less.

There’s been cloud, artificial intelligence, big data – and all have their huge merits that will continue to realise major benefits. Arguably though, blockchain – the technology behind digital currencies like Bitcoin – is the most likely to have the greatest impact in 2017 and way beyond as we start to look to a new decade of possibilities.

Importantly, it’s the ethos at the heart of blockchain that makes it so robust, adaptable, and ultimately, successful. It’s available to everyone, and through it, anything of value can be transferred, then stored securely and privately. It should come as no surprise then to note that the Bank of America and Bank of England have been among those looking very seriously at how to best harness those significant abilities.

However, key to blockchain’s growth has been the fact that trust has been easily established by users. There are simply no intermediaries like banks, governments or tech giants; instead, mass collaboration, clever coding and integrity are what make it tick and indeed thrive.

Essentially, it’s the first native digital medium for value, and that makes it hugely attractive for business.

Of course, for some time now, blockchain has been intrinsically linked to the financial services industry where it has served to reduce complexity while improving efficiency, transparency and regulation. Nevertheless, its benefits go way beyond that. Indeed, it’s becoming increasingly clear that blockchain has the power to transform much more – from business and government, to even wider society as we know it.

For one, blockchains have the ability to dramatically reduce transaction costs. Smart contracts on blockchains will vastly lower the costs of contracting, enforcing contracts, and making payments. Likewise, they hold the potential to eliminate agency and coordination costs, effectively taking out the middle man and making the relationship a direct one between buyer and seller.

Under such a scenario, the likes of royalties and licensing agreements are delivered instantly and automatically with no intermediary required. Blockchain technology allows creators of intellectual property to realise its true value directly.

Similar to the Uber effect, blockchain allows the suppliers of services to cut out sharing economy companies and instead collaborate by forming cooperatives that allow all revenue to go exclusively to members.

Blockchain technology also holds the potential to take networked business models into new realms by supporting a whole host of new applications. Immediately springing to mind are native payment systems that run without banks’ involvement, reputation systems controlled purely by individuals, and trustless transactions where no previous relationship between the people involved is required for effective usage.

We are already seeing an impact in such areas as cloud-based learning and student authentification, counterfeit protection for digital assets and proof of ownership, not to mention electronic voting and voter authentification.

Yet, where blockchain can really come into its own is through the Internet of Things – as our global network of connections continues to grow, it will require a system to manage the accompanying huge number of transactions, and blockchains would provide an ideal format for doing so.

The implications of what can be achieved beyond the financial services industry are simply immense. In 2017, blockchain will undoubtedly make huge strides in terms of relevance, uptake, and importantly fuelling the next generation of startups.

In fact, it looks set to usher in an exciting new dawn in online and digital activity, characterised by heightened trust, security, and efficiency – key requisites for growth in anyone’s language.

Image from Shutterstock.

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