The Blockchain Revolution
Last week, Carl Eschenbach (Sequoia, ex-VMware) and Jeff Welser (IBM) talked about the upcoming blockchain technology and how it is slowly changing business and economy. According to Harvard Business Review, “Blockchain will do for the financial system what internet did for media” (https://hbr.org/2017/03/the-blockchain-will-do-to-banks-and-law-firms-what-the-internet-did-to-media) and so I decided to go deeper into the topic and explore how it will revolutionize the world.
Blockchain is a distributed database or a giant global spreadsheet that runs on a huge network of computers. It is an open source digital ledger that uses state of the art cryptography so anyone can see what’s going on. It has the potential to eradicate banks, brokers, and all other powerful intermediaries that we need to authenticate or settle transactions because it is peer to peer with a small transaction fee. Imagine a world where every single transaction, contract, bond, payment is written on this digital notepad transparent, secure, unhackable, and available to all.
Why Should You Care?
Every business, institution, government, and individual can benefit from this in profound ways. Whether you are a student studying abroad and trying to send or receive money from home, or an artist trying make a living off of your art, blockchain based applications will serve these ends in an inexpensive and easy way.
Also, in this day and age, Internet Of Things is growing rapidly and soon billions of smart things in the physical world will be sensing, responding, communicating, and sharing important data as well as generating, buying, selling, and managing day to day activities. As it grows, IOT will soon need a ledger of everything and when that day arrives, blockchain will take over. IBM itself has invested 200 million$ in blockchain powered IOT with more than 1000 employees working in the area. (http://expandedramblings.com/index.php/blockchain-statistics/)
By 2024 the global blockchain market is expected to be worth 20 billion. Blockchain has a lot of parallels with the internet and how it grew and experts predict that like the internet, this new tech will also slowly take over, it’s not a disruptive but an adoptive platform which will take time to remove the unnecessary intermediaries and help create a safer more connected network. Bitcoin is one of the killer apps of blockchain. Just as email enabled bilateral messaging, bitcoin enables bilateral financial transactions. The implications of this are unimaginable. New blockchain startups are working on cyber security to help track down criminals in faster cheaper ways. Blockchain is going to be adopted by central banks who want to get involved with cryptocurrency, or they could replace banks entirely. Finance in many nations could be dominated by Bitcoin and related currencies. It could save lenders up to 20 billion dollars annually in settlement. It has the potential to create new industry opportunities and disrupt existing processes. It could even make a great impact on the election process which although currently expensive and arduous could become much more cheaper and instantaneous.
Blockchain is the future of finance and should be carefully kept and eye on by budding entrepreneurs and tech enthusiasts because it is going to revolutionize the industry in unexpected ways, making it a faster, smarter, better world.
References :
https://www.wired.com/insights/2015/01/block-chain-2-0/
http://expandedramblings.com/index.php/blockchain-statistics/
https://hbr.org/2017/01/the-truth-about-blockchain
https://hbr.org/2017/03/the-blockchain-will-do-to-banks-and-law-firms-what-the-internet-did-to-media
http://er.educause.edu/articles/2017/3/the-blockchain-revolution-and-higher-education
http://www.mckinsey.com/industries/high-tech/our-insights/how-blockchains-could-change-the-world
https://www.shapingtomorrow.com/home/alert/665529-Future-of–Blockchain
https://www.youtube.com/watch?v=r43LhSUUGTQ
3 comments on “The Blockchain Revolution”
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Thank you for the great article Arohi,
I totally agree on your assumptions of the blockchain potential. However, I would like to look further into the technical and economic problems it implies, in order to get an understanding of when this revolution will start. For instance, many voices in the industry have been calling blockchain the “solution without a problem”, referring to its lack of applicability at this point in time. In regards to this, how will the financial industry deal with the fact that blockchain technology will, as it is expected, cut off large stakes of their revenues…
I hope my comment brought in some reflective aspects of what will be happening in the financial industry in the next 5 years.
Thank you for your article, but I have to admit that I disagree on your stated blockchain revolution. From my perspective, the only vibe is that people believe in it and it was heaving a crazy growth in value, and some people became millionaires of it. But, if you just take it by the fact, what was the problem will other currencies, actually no. The rise of cryptocurrency started in the Darknet because of its anonymity (buying weapons etc…) Having no control is on a currency ist, not a solution. And the issue is at the end, that the currency is controlled by the guys who invented it and coded the blockchain and not as many people assume safely because of its distribution.
If you are lucky for quick money and using the vibe, you can make a lot of money out of it, but for a long term use, I doubt that.
But with my article, I don’t want to criticize the blockchain technology. In my perspective, it is an amazing technology but what the people have not yet been able to do, is to find a nice solution t solve problems in our society. Blockchain can do a lot more than being a currency only. But from the currency perspective, I don’t see a rising future on the long term perspective.
(MS&E 238A WEEK 2)
Great post! I was very interested by the theory that the blockchain may eventually replace banks altogether, which prompted me to look into the way blockchain and finance are related. I found this article – (https://www.forbes.com/sites/laurashin/2016/05/26/how-the-blockchain-will-transform-everything-from-banking-to-government-to-our-identities/#156d5188558e) – that raised two interesting points related to this topic.
First, Alex Tapscott says “trust is not established through a third party but with clever code and mass consensus using a network.” I believe that this is a reason that it will take a while for blockchain to become more widespread (other than the need to further develop the technology). It is the same reason that movement to the cloud hasn’t been immediate among all organizations and businesses – a high level of security and trust by users is necessary. It will take time for people to learn this technology and to trust it. I imagine it will take many years for individuals to become comfortable handling all of their finances without a human intermediary with which they communicate.
The second point that this article makes is that blockchain would result in more people (i.e. include those that currently are not eligible to open up a bank account) “sharing” in the economy. This implies that blockchain would not just change how we handle our finances, but will change the nature of the economy at large.
For these two reasons, I think that there may very well be a “blockchain revolution,” but that it will take a very, very long time.