When Blockchain Becomes Useful

When Blockchain Becomes Useful
When Blockchain Becomes Useful

One of the burning questions about blockchain, is whether it is going to start becoming useful in this upcoming year, 2019. Since it inception, more then 10 year ago, we all have read how blockchain is going to change everything. But after many years of effort developing it and billions of dollars invested, we have yet to see outcomes with a palpable use for the blockchain. Some possibilities, seem to be emerging though:

Blockchain and Fintech

In the financial sector, as MIT reported, blockchain was widely tipped to become disruptive to the global financial system back in 2017, but this did not really happen. In 2018 there was further disillusionment, with expectations not being brought about in reality. This has led to a situation where cryptocurrencies have fallen very significantly from their peak.

However, the underlying technology is still very much of interest. In fact, analysis would appear to show that 2019 is the year when blockchain technology may start to become truly of use. In particular, some analysts firmly believe that there will be an increased use of digital asset services by financial institutions in 2019. This was a trend that commenced in 2018 and seems set to continue. Cryptocurrency is considered here to stay by many, and this has led to people wanting ways to manage digital assets. Some financial firms are jumping on this business opportunity. An example is the Digital Asset platform that has been produced by Fidelity. There is also a similar platform operated by ICE (the organisation that is parent to the New York Stock Exchange), the Boston Consulting Group, Microsoft and Starbucks. It is predicted with some degree of certainty that this trend is likely to continue upward in 2019.

Smart Contracts

Smart contracts are also considered likely to come into their own in 2019. Smart contracts are essentially programmed code that helps to confirm an agreement made between two groups/individuals. Using smart contracts is useful because it helps to cut out intermediaries, which can be expensive. These are not easy to execute because in many cases they rely on the securing of real-time data to ensure that the conditions are met, for the agreement of the terms of the contract, and exchange to go ahead. To date, there have been concerns and issues around this, with regard to data security. A company called Chainlink has been working with Cornell University to help improve the security of this type of data using cryptography, and advances are being made.

Blockchain and the Legal Industry

Further to the above, this technology is considered to be particularly useful for the legal industry. Chainlink is working with an initiative known as OpenLaw, and the latter is working with Rocket Lawyer. Together, smart contract-based legal agreements are being produced. This helps to ensure that legal obligations are being met, and if they are, then payments can be transferred utilizing cryptocurrency. While the solution is not yet live, it is likely to launch in 2019, and the plan is to make it as user-friendly as possible. These organizations are not the only ones working on these types of solutions – others such as Monax and Clause are also developing similar technologies.

Blockchain and Supply Chain

Another development that is likely to bring about actual usefulness in 2019 is in the area of supply chains. Blockchain is starting to show real potential in practical terms with regard to traceability and transparency in supply chains. Companies that have been investigating the use of blockchain in this regard include Walmart and Nestle.

Walmart for example has been working with IBM on a food safety blockchain solution, and it is planning to require that all its suppliers of leafy green vegetable to beginning uploading their data to the blockchain by September 2019. Most supply chains use manual processes to do so thus this is a huge step and it will be interesting to see what will be the outcomes of it. On the other hand, having these corporate giants take the lead in terms of blockchain development and implementation of solutions, does arise other worries. Will the technology keep up with its positive ethos of contributing for a fairer, more transparent and also more equalitarian society? Or will it be corrupted, when taken over by large corporations, still driven by profit and competition at all costs?

From September 2019 onwards, Walmart will require that all its suppliers of leafy green vegetable upload their data to the blockchain.

The challenge to date has been that blockchain has not had a way to know what occurs in the real world, and it needs truthful data to back up solutions. What this has meant is that a person has had to link real word objects to assets on blockchain – making this person a weak link in an otherwise secure system. Additionally, sensors have proven so far to be too easily manipulated. However, large companies such as those mentioned have been working on experiments to overcome these challenges. Developments in this area look likely to become useful very soon. This has real practical implications with regard to fraud and shrinkage, which can save a great deal of money for businesses worldwide if implemented.

As can be seen, blockchain is indeed likely to start becoming useful in real, practical terms in 2019. Some patients will be worthwhile, as technological challenges are ironed out, and workable, reliable and secure solutions are delivered. The types of developments that are predicted are likely to ensure that no one becomes bored of blockchain any time soon!

Article written by Maria Fonseca and Paula Newton