Bryant Nielson | June 12, 2023
Nolan Bauerle, an author at Coindesk, says that blockchain technology based on its qualities and merits is not the new technology. Instead, it is a blend of proven technologies being used in a new way. According to Bauerle, blockchain is the specific composition of three technologies i.e. the Internet, a protocol governing incentivization, and private key cryptography making bitcoin and other cryptocurrencies so useful as well as disruptive. The current and potential effects of the blockchain disruption seem to put almost every industry and more than half of the world’s population under the blockchain’s digital headlights. This is the disruptive innovation of blockchain that seems to occur across all businesses, governments, politics, and across our daily lives.
About a Ubiquitous Disruption – Catching Us at a Faster Rate
Digital disruption has been around us and our generations for decades. Something just disrupts others, like the change from Nokia’s famous 3310 mobile phones to Apple iPhone, manual trains to automatic driverless metros, manual landline calls to voice-making apps, mainframe computers to sleek and compressed personal computer systems, and so on. Everything invented was disrupted or at least about to be.
History repeating itself in the shape of blockchain
During the times of the Italian Renaissance, Hindu-Arabic numerals originated in the east and an accounting system used by the Italian mercantile houses of different northern Italian republics came together to change the basis of the business. With the arrival of modern double-entry bookkeeping, merchants and retailers were able to look into the integrity of the financial values noted in the ledgers. Today, every business has the same system.
In some ways or others, blockchain is a contemporary digital double-entry bookkeeping, however, on steroids. Don Tapscott and his son Alex Tapscott, writing The Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, And the World, affirm that blockchain reflects the second generation of the internet, with the capability to innovate money, government, business, and society.
In the article published on Time, the authors explained blockchain as the very first native digital platform for P2P value exchange. Its protocol sets the rules in the shape of globally distributed computations as well as fool-proof encryption, which guarantees the integrity and privacy of data being exchanged across a vast network consisting of billions of devices, without needing a trusted third party. Blockchain thus, acting as a database, ledger of accounts, a sentry, a notary, and a clearinghouse, has the potential to make us all caught in its digital headlights.
The Main 4 benefits
The four most-critical benefits of distributed-ledger technology are summarized:
Trust is built as the danger of fraud and data leak is greatly abridged, with the likelihood of data tampering decreased to virtually zero, particularly so as the network expands to be larger. Control of information is related to the users with a consistent and complete record. Once the transaction achieves consensus and is shared across the network, it is almost impossible to reverse or temper it. The absence of middlemen or any “centralized monopolies” decreases the costs and will eventually obstruct barriers to entry, further enhancing the efficiencies. Another value is the higher speed for transactions’ processing and verification.
The $16 billion reason
Banking and transactions are the clear places to capture the blockchain opportunities and are perhaps the main focus presently. The obligation to “know your customer” is ideal for blockchain solutions and the reward to avoid fines for anti-money laundering and sanctions breaches is huge after BNP paid $8.9 billion, is on the top of the list of 13 banks wasting over $100 million each ($16.1 billion in total) in between 2008 and 2015, for the U.S. sanctions breaches.
Royal Bank of Scotland also demonstrated other possible streamlining advantages beyond complying with heavy anti-money-laundering regulations. With a workforce of 2,000 focused completely on know-your-customer compliance in 2017, the bank, through digital solutions, started to lower the headcount by 95%. The time and cost efficiencies that blockchain-enabled identity verification and record-keeping bring are clear, to say nothing of better customer satisfaction.
The supply chain is the big winner too
Supply-chain management is the list of transactions that monitor the products from the point of sale to the final deployment and is a big part of global trade. Fraught with disorganizations, from inventory mismanagement, human error, financing, and shipping, the number of links in the chain is still a key challenge.
Blockchain disrupts it with a real-time, validated ledger offering clear visibility of the location, owner, and condition of an asset, which cut fraud costs and modernizes order management.
In Europe, car leasing, for instance, is a 350 billion-euro market and is a prominent example of an industry reaping the digital change brought about by blockchain. Its diversity of stakeholders —insurance, finance, manufacturer, registration, and dealerships, — provide an important opportunity for reorganization to decrease complexity, fraud, and cost.
We, both on individual and collective (business) levels must think of the ‘forces of blockchain digital disruption’ as the ‘time of displacement’ as we are all caught up in the blockchain digital headlights. The headlights are certainly full-on and blinding almost every one of us, requiring us to promptly respond as it is the only way it will give us a chance of standing out in this period of (digital) revolution. The Blockchain technology headlights should not disable us; we must be ready to it use it as an enabling technology.