The IT Roundup: Where will blockchain take the global economy?
April 4, 2016 | By Lisa Dare, TEKsystems Digital Content Strategist
Don’t think bitcoin matters? IT leaders disagree.
While bitcoin itself is worth a surprising—but relatively insignificant—$20 billion, the blockchain technology it’s built upon has world-changing potential. In fact, The Economist called it “the next big thing.”
Blockchain, essentially a distributed digital ledger, removes the need for a centralized authority to regulate and record transactions. The technology allows users to create a transparent, theoretically inalterable record.
IT leaders polled for the World Economic Forum’s Technological Tipping Points report believe:
- A government will start collecting tax via blockchain in the next seven years
- Blockchain will store 10 percent of the world’s GDP by 2027
In fact, blockchain is already having an impact: it’s being used to track official property records in Honduras.
Banking and tech dive in
Big banks, including JPMorgan, and tech companies are exploring new ways to use blockchain, too. The highly regulated Depository Trust & Clearing Corp., which keeps and processes records for stock and securities trades for trillions of dollars’ worth of transactions a day, just announced a test program for a blockchain app for one of its markets. If the pilot goes well, use of the blockchain is likely to spread even faster.
Blockchain and a new sharing economy
The WEF predicts Blockchain and the sharing economy will intersect in a big way, with distributed trust systems allowing transactions that don’t need to be mediated. In a nutshell, a blockchain app could be programmed to oversee a contract or financial agreement, automatically transferring funds once a condition is met.
What does it mean? Some believe blockchain protocols could remove the need for platforms like Uber, which extract exorbitant amounts of money (up to 30 percent commission on every fare) as a technological middleman. As such, blockchain has the potential to make the sharing economy more equitable in developing countries often hindered by inconvenient financial transactions or squeezed by middlemen.
The built-in trust blockchain delivers could also remove hindrances to individual-level international trade. Blockchain-powered transactions will offer enhanced speed and trust, and a near-frictionless process. Creating a direct connection between people anywhere in the world, with the ability to securely trade, is a major step in delivering upon the promise of an Internet-enabled economy open to any person, in any place, who owns a smartphone—which 37 percent of people in developing economies did as of 2015.
A few of the other potential impacts for blockchain:
- Enabling transparent online voting systems
- Creating safer medical records
- Copywriting artistic works without a centralized registry
Keep up with other technological tipping points
The IT Roundup: Big Data and AI approach a tipping point
The IT Roundup: IoT: Interoperability, security and digital transformation in 2016 and beyond
The IT Roundup: Digitizing matter, just in time for the holidays
The IT Roundup: The merging of humans and technology