Jan 07, 2022

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The Future of Blockchain Technology in 2022

At the end of 2021, the global cryptocurrency market cap reached $3 trillion – an all-time high.1 Cryptocurrencies like Bitcoin and Ethereum are underpinned by blockchain technology. The adoption of blockchain, and the technology and products it supports, will continue to impact business operations dramatically.

But blockchain technology is much more than a system for securely transferring cryptocurrencies. Outside of finance, it can be used in applications including healthcare, insurance, voting, welfare benefits, gambling, and artist royalties.2 With the technology already impacting business and society on many levels, the global economy is preparing for the blockchain revolution. If ‘revolution’ sounds dramatic, consider that eight of the world’s 10 largest companies are building an array of products incorporating blockchain.3

Any industry or organization involved in the recording and overseeing of transactions of any kind stands to benefit from moving its operations onto a blockchain-based platform. Take a look at the following predictions of how blockchain technology will influence various sectors of the global landscape.

1) How blockchain technology can disrupt financial services

One area predicted to continue evolving with blockchain technology is cross-border payments. These recent developments are leading transformation on this front:

IBM’s Blockchain World Wire – This blockchain-enabled conduit used the Stellar protocol and allowed for banks to clear and settle cross-border payments almost immediately. The World Wire API integrated into banks’ payment systems, with World Wire then converting the digital asset into currency, completing the transaction. In light of the COVID-19 pandemic, IBM ceased running the network and made the code open source, inviting the development community to build on their learnings.4

Paystack – Paystack creates payment infrastructures and connects payment processors with each other with the goal of making it quicker and easier to facilitate online payments. In October 2020, financial services company Stripe acquired Paystack for $200 million. The service expanded to South Africa in May 2021, by which point it was powering 50 percent of online payments in Nigeria, where it was founded.5 And in September, it became the first Nigerian payment gateway to become an Apple Pay partner, opening it up to 380 million users across 60 countries.6

Ripple and Pyypl – San Francisco-based software vendor Ripple has been specializing in global real-time payments, based on blockchain technology, since 2014. They recently partnered with Dubai-based technology company Pyypl, which has created a blockchain-based platform offering non-bank financial services via smartphone. Because the platform doesn’t require the pre-funding needed in traditional cross-border payments, where additional funds must be kept in the user’s bank account, this should help increase the liquidity of companies that use it.7

AZA Finance – This company uses blockchain technology for small businesses to send and collect payments to and from Africa. By converting the relevant fiat currencies into stablecoins rather than U.S. dollars when trading, AZA says it can reduce reliance on a dollar-dominated system, trade during banking holidays, and increase trade efficiency.8

Blockchain technology has applications outside of payments too. Below are additional examples of fintech innovations using blockchain.

Securrency – This is a trading platform for cryptocurrencies and any kind of asset. It is exchanged through Securrency tokens, which allows cryptos to be traded outside of their dedicated exchanges.9

ABRA – This global app and cryptocurrency wallet allows you to buy, invest, and store up to 100 cryptocurrencies. The company recently raised $55 million in funding to help develop a comprehensive product range to help people manage their money.10

Numerai – This company aims to build an open-source hedge fund by sending encrypted datasets to thousands of decentralized quantitative analysts, who build predictive models. The best are rewarded with Numerai’s token and used to create a trading meta-model.11

Bloom – This startup is applying blockchain to credit scoring by building a protocol that manages risk, identity, and credit scoring.12

If you want to learn more about cryptocurrencies, UCT offers the Blockchain and Digital Currency: The Future of Money online short course. This six-week program reveals how crypto assets are set to shape the future of the financial industry, while imparting a practical working knowledge of blockchain and cryptocurrency assets.

Also focusing on cryptocurrencies is the SDA Bocconi School of Management’s Bitcoin and Blockchain Program. This five-week online course explores the technical pillars that underpin these technologies, and is ideally suited to individuals driven to remain relevant by upskilling to address this new business need.

2) Adopting blockchain technology in business

Blockchain technology has huge implications for business, with the main drivers for adoption being higher revenue, lower costs, and more efficient use of time. Examples of how blockchain is being adopted by corporate companies include:

ConsenSys Quorum – Originally developed by JP Morgan, Quorum is an enterprise-grade service that helps companies grow and manage large-scale blockchain networks.13

LVMH – The luxury goods company is tracking goods and fighting counterfeiting through blockchain. It has registered more than 10 million products on a platform created in conjunction with Prada and Cartier.14

MediaChain – This blockchain database was acquired by Spotify to manage copyrights and royalty payments, and resolve rights holder issues.15

3) Application of blockchain in the legal field

In law, blockchain technology can be used to create smart contracts, as well as validate ownership documents such as title deeds. If used to validate, authenticate, and secure courtroom evidence, blockchain could improve efficiency in the criminal justice system.16

Smart contracts are digital contracts that uphold the nature of a legal contract. The terms of the contract are written in code and automatically executed when the agreed conditions have been met, without the need for any involvement or intermediary. When this happens, the blockchain is updated, and only parties with permissions can see the results.17

Some states in the U.S. have begun to permit the use of smart contracts in certain legal contexts. These include Arizona, where parties can create enforceable legal agreements through smart contracts, and California, where marriage licenses can be issued via blockchain.18

4) The use of blockchain in real estate

Real estate transactions are usually expensive, paperwork-heavy, and require the assistance of agents. Blockchain has the potential to ease the process of finding and buying real estate through tokenization, using digital real estate tokens to represent physical assets. This would:

  • Ease transfer between buyer and seller by cutting out the need for a middleman
  • Provide irrefutable proof of ownership via a distributed digital ledger
  • Facilitate smaller real estate investments, as a token can be divided in the same way as a bitcoin
  • Improve market security and transparency because every transaction is processed and approved by others19

Examples of real estate using blockchain technology include Deedcoin, which connects real estate agents with home buyers and reduces commission to 1 percent, and Harbor, which enables the tokenization of private securities, REITs, land titles, and land registry records.20

5) Improving logistics and supply chain through blockchain

Supply chains – the links between the creation and distribution of goods – have always been disrupted by innovation. Today’s supply chains are extremely complex, threading multiple continents, including huge numbers of invoices and payments, involving myriad entities, and potentially extending over months.

Due to this complexity, blockchain is an attractive means to transform the supply chain and logistics industry. When goods are transferred to a new step in the supply chain, the process can be logged securely and permanently, creating an immutable, auditable history from its point of origin to that of sale.21

Below are some examples of innovative logistics and supply chain-focused blockchain applications:

TradeLens – Developed by IBM, this blockchain solution for logistics and supply chain provides transparency and improved efficiency through blockchain, offering a holistic view of shipment data and documents.22 More than half the world’s container ships are registered on the platform, and in 2020 it processed 1 billion shipments.23

Provenance – Consumers are increasingly demanding transparency regarding the products they purchase to ensure the ethical sourcing and production of products. Provenance uses blockchain to prove chain-of-custody and certification of supply chains.24

Honeywell – The U.S. conglomerate has partnered with iTRACE and SecureMarking to secure, track, and trace its aerospace parts throughout the world. It does so using laser-etching and invisible ink on the parts, encoding this information onto a blockchain ledger for digital authenticity.25

De Beers – De Beers mines, trades, and markets more than 30% of the world’s supply of diamonds. The company uses a blockchain ledger to trace diamonds from the mine to the customer purchase, and helps confirm diamonds are free from conflict.26

6) Healthcare innovations through blockchain technology

Blockchain’s open yet highly secure nature makes it a natural fit for improving healthcare. Patient information, for example, can be stored in an incorruptible, decentralized, and transparent database, making it safe but accessible to patients and healthcare practitioners alike.

Other primary applications for blockchain in healthcare include:27

  • Protection of healthcare data
  • Personal health record data management
  • Point-of-care genomics management
  • Electronics health records data management

These are some innovative blockchain applications in this space:

MedicalChain – Offers a blockchain solution to create a user-centric digital health record that can be shared with doctors easily. All information is recorded in an auditable, secure, and transparent format.28

Guardtime – This company is helping healthcare organizations and governments implement blockchain in their cybersecurity systems to keep essential data secure.29

Curisium – This blockchain platform is designed to streamline rebate negotiation and contract management through the use of innovative digital contracts.30

Robomed – This platform uses telemedicine sessions, chatbots, and wearable devices to collect patient data, recording it on blockchain so it can be shared securely with healthcare professionals.31

The MediLedger Project – Initially launched by Chronicled in 2019, the MediLedger Project aims to improve the track-and-trace capabilities for prescription medicine. Built to meet the requirements set out by the U.S. Drug Supply Chain Security Act (DSCSA), the blockchain healthcare project meets the legal requirements as well as supporting the operational needs of the pharmaceutical supply industry.32

The impact of blockchain innovation on business

The tools and platforms described are just a few examples of how blockchain technology has been applied in various industries. This highlights the implications this technology will have for businesses, trade, and entire economies and how important it is for business leaders, tradespeople, and decision-makers to become familiar with the technology.

Deloitte’s 2021 Global Blockchain Survey found that 81 percent of business leaders believed blockchain was broadly scalable and had achieved mainstream adoption.33 Blockchain skills have become one of the most sought-after proficiencies in the world, with the demand increasing by 59 percent from the end of 2020 to the beginning of 2021.34

Future-proof your blockchain knowledge with an online course

The MIT Sloan School of Management Blockchain Technologies: Business Innovation and Application online short course helps professionals develop these skills. This six-week program takes a fundamental look at how blockchain is impacting business and economics, while teaching students how to use blockchain technology to create greater organizational innovation and efficiency. Learn more about what you can expect on the course.

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