Blockchain technology has radically transformed and gained traction in the capital markets industry as one of the most revolutionary technological developments in recent history. The last few decades was about the ‘Internet of information.’ Now the internet is entering an era based on the blockchain. Industry is witnessing the rise of ‘Internet of Value.’ In the era of the Internet of Information, industry has experienced the convergence of computing and communications technologies, while the Internet of Value will be powered by a smart combination of mathematics, cryptography, software engineering and behavioural economics.
Blockchain technology which is also called ‘distributed ledger technology’ promises to disrupt industries by challenging how we define value, structure society and reward contribution. Technologists strongly believe that blockchain will disrupt business and redefine organizations and economies. Blockchain technology is although, in the early stages of R&D and Prototyping of use-cases, has significant potentials and helps create value by simplifying business processes and create trust, reducing the settlement times, safe records of transactions and business agreements, minimize counterparty risks, increase transparency for regulatory reporting, improve contractual term performance and User controlled networks.
Today, almost every company, be it a start-up or a corporation, is trying to create their own blockchain with specific use-cases to disrupt an array of industry sectors like Manufacturing, Healthcare, Trade, Finance among many others. According to a survey conducted by the World Economic Forum it predicts that 10% of global GDP will be stored on the blockchain by 2027. Even though the majority of blockchain technology is in the finance industry, there is increasing interest in exploiting the application of blockchain technology in other sectors… especially in the manufacturing sector.
Knowledge and understanding of Blockchain technology remains one of the principal challenges as there is a lack of awareness and understanding of how it works, especially in those sectors other than the banking industry.
Many companies are investigating the application of blockchain technology for supply chain management and auditing. Recently, IBM and Maersk announced a joint venture to create and deploy the world’s first blockchain based electronic shipping platform that will digitize the supply chain and track the international cargo in real-time for the manufacturing industry. The objective of this project was to reduce the paperwork and effort involved in shipments. It is an end-to-end shipping solution which will give all the parties involved in the global trade a single view of where the cargo is and allow authorities to grant electronic approval for its movement. Blockchain will enable a single view of all the goods and shipping information via a virtual dashboard for the concerned parties right from manufacturers, shippers, port authorities and government agencies. IBM and Maersk hope to reduce the shipment costs dramatically, by reducing the paperwork, providing critical information rapidly and frequently and prevention of shipping fraud.
In my opinion, blockchain technology would work wonders if it is regulated and follows Industry standards and methodologies. The solution which I am proposing is that every industry should develop their own industry-specific blockchain which is authorised and approved by that particular industry body. I believe this will create a ‘Secured and Trusted’ Industry-specific ‘Shared Network.’ This solution will eliminate the need for an individual company to build their independent blockchain platform and this by itself will resolve many of the above challenges which I have raised.
To summarize, any new transformation has its underlying challenges which could pose significant roadblocks on the path of implementation if not addressed early-on. However, blockchain technology will evolve in the coming years which I predict to be a ‘Trillion Dollars’ Market, and after all, just like nature, technological advancements will find their way around the artificially constructed barriers as they evolve.
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