Blockchain technology is destined to fundamentally change the world. Beyond early adopters (and early birds), the majority of people seem to be oblivious to the idea that blockchain technology will bring about disruptive innovation, the kind of technological innovation that almost completely refreshes the way a market or industry operates or functions.
Blockchain Disruption – Disruptive Innovation
We are still pretty much at the beginning of the blockchain revolution; the early adoption phase. Yet, in all likelihood, there isn’t a single industry in existence that is not expected to experience blockchain disruption on a massive scale.
The application and use cases of this game-changing technology are so vast and powerful in scope, that once you take the time to look deeper into the matter, it is hard not to stand back in absolute awe. At the same time, it is hard not to wonder about the impact this may have on various industries, including the industry that you may be dependent on in terms of your bread and butter.
Technological unemployment, like during the early stages of the Industrial Revolution when steam machines replaced human labor, is something that you will have to take into account. This underlines the importance of empowering yourself with the knowledge and skills required, to not only survive the disruptive innovation broadband technology will bring about, but to thrive in the process.
Industries Affected by Blockchain Technology
Let’s consider three of the industries that are poised for blockchain disruption. Let’s focus predominantly on the Advertising Industry and to a lesser extent, the Financial Services Industry and the Food Industry.
The advertising industry faces many issues today. This is predominantly a result of the monopolistic, domineering influence a few dominant players have on the market. They have shown that they cannot be trusted with our personal data. They abuse it for personal gain, while buyers and sellers get the short end of the stick.
In addition, the centralized systems these dominant players use to store our personal data are susceptible to attacks. And when attacks are successful, they normally refer to it as “data breaches” and offer excuses and empty apologies. As if our personal data is of little to no value! Yet, beyond “data breaches”, many of them used to make billions of dollars in the normal course of business by selling access to our data without our permission.
Steps have been taken to rectify the situation, but it might be too little, too late. For example, the extent to which legislation such as Europe’s General Data Protection Regulation (GDPR) is making a positive impact is debatable. There are clear benefits to GDPR, but also disadvantages. For example, the cost of compliance it introduces into the equation places an unnecessary burden on organizations, especially small and medium-sized enterprises (SMEs) that cannot really afford the extra cost layer. And while GDPR pushes for the standardisation of data protection and may help to improve cybersecurity, it doesn’t remove the numerous risks attached to data breaches or successful attempts to steal or destroy data where centralized systems are involved.
In addition, if we look at the basic advertising model in place today, it is clear that the only ones who truly benefit from it are the dominant players. Sellers or advertisers are expected to be satisfied with high costs and low conversion rates. On the other hand, buyers are frustrated by having to view excessive ads that are mistargeted and for which they don’t receive a penny of compensation in return.
Blockchain technology is expected to change all of this:
- It makes it much easier to comply with legislation as compliance is enforceable through the deployment of smart contracts at low cost.
- It is much harder for black hats to steal or destroy data that is cryptographically secured and not centrally stored.
- The blockchain brings much needed transparency to the table as all transactions are recorded on it. The blockchain doesn’t lie.
- An advertising solution based on blockchain technology can help to level the playing field by providing everyone with an equal opportunity to participate. A blockchain-based, on-demand advertising platform such as the one being created by WeBuy will firstly, help to substantially lower the barriers to entry, and secondly, introduce an advertising model that actually makes sense. Blockchain technology allows for reliability, full transparency, and cost efficiency beyond what’s otherwise available. It is also makes the the creation of Decentralized Autonomous Corporations (DACs) possible – a complete game changer.
Financial Services Industry
The financial services industry is also plagued by problems that are predominantly the result of the dominance of a few. Many existing blockchain solutions have the capability and potential to completely overhaul and disrupt the financial services industry – and in a greatly positive sense.
Regulatory uncertainty is one of the biggest stumbling blocks cryptocurrencies and existing blockchain solutions face at the moment. Despite this, it is already possible to transfer value in the form of cryptocurrency across the globe within a matter of seconds outside of the traditional bank system. It is also much safer and cheaper to do so by using cryptocurrency.
As an example, cryptocurrency Stellar (XLM) offers an average transaction time of 5 seconds and it costs about 1 cent to do 300,000 transactions via the Stellar Network. Yes, you’ve read that right, “it costs about 1 cent to do 300,000 transactions via the Stellar Network.” This while the use of cryptography helps to secure the network beyond what any bank can offer.
On the other hand, the SWIFT network used for international payments in the legacy financial system is a horse of a completely different color – a nightmare. It is expensive, slow, unsafe and susceptible to errors that cause missing payments and other problems.
In short: There is nothing the legacy financial services industry offers that can compete with what cryptocurrencies have to offer.
The food industry faces its own set of challenges, including the loss and waste of food due to inefficiencies built into the existing food supply chain. This contributes to an estimated loss and waste of food to the tune of 1.3 billion tonnes per year. Food that could have been used to feed the estimated 795 million people across the globe who don’t have enough food to eat in order to lead healthy, active lives.
The deployment of blockchain technology can greatly alleviate the problems experienced in the food industry. It can for one help to streamline supply chain management (SCM) in the food industry by bringing transparency to the table in the form of secure, easy verifiable data that can be accessed at any point along the supply chain. This while it can be done in a much more cost-effective manner than what is traditionally the case.
And this is only the tip of the iceberg. What other industries do you see being completely revolutionized by blockchain technology?