Blockchain: What comes first? An Opportunity or a ThreatIn spite of few possible and serious threats, I still feel, Blockchain has still not been explored to its potential and a very big question remains unanswered left only to be answered by the future, i.e. what comes first with Blockchain, opportunity or a threat?
Blockchain, with time, has gained a momentum in the technological debate since 2016. First came Bitcoin (in terms of debate), then came Ethereum, Blockchain followed and now, every other Linkedin update announces an ICO launch or an exchange. So, what allowed these ongoing controversial talks? Performance, and the unexpected promise of decentralized Technology-Power by the people and for the people. However, the world took time to understand that Bitcoin was a cryptocurrency powered by Blockchain, but it did not take time, for the Governments and the Banks to sense the threat; a threat to their decades of established control.
No doubt, Blockchain represents an important opportunity to revolutionize payments, supply chains, and revenue streams but it is also true that there are several unknown risks for both organizations and governments. What business leaders fail to understand is the actual grip of this emerging technology, which, does require an explaining!
The adoption of IoT (Internet of Things):
The blend of physical and digital worlds, IoT has been around some time now; 2017 saw around 31% increase in IoT connected devices, i.e. around 8 billion, according to an analysis firm, Gartner. This is set to reach 20 billion connected devices by the end of 2020. Now, since IoT is not the only serious technology on the run, accounting backbone, blockchain technology is capable to fix one big problem of IoT, i.e. security infrastructure.
In addition to the security fix, IoT can now expand its capabilities, that is ensuring a reliable and fast connection. Means, that in so many ways, Blockchain and IoT are a perfect pair. Blockchain’s inevitable decentralized network and embedded smart contracts are the significant solutions for IoT security concerns. Let’s have a look at the benefits of convergence of IoT and Blockchain:
- Flexible and new jobs in organizations
- Real-time data analysis and aids
- Revised customer experience
- Intelligent machines with a capability of automating tasks
- Reduction of waste in the supply chain
- New jobs in flexible organizations
According to me, Blockchain and IoT will be the best of friends in the coming 5 years.
Streamlining business across borders:
To define Blockchain in terms of business; it is a facilitator of automated tracking of every single transaction. Having a potential of at least partially automating accounting and compliance, Blockchain has opened doors to a more transparent auditing, further connecting industries with new global customers, an aim every industry pledges for.
According to Fay Shong, who is the Oil & Gas Strategy Leader of EnY, quotes: “Blockchain has increasing relevance to the oil and gas industry as a mechanism to reduce operating cost. Even more relevant, however, is blockchain’s ability to transform the contracting process given its aptitude to provide a secure form of collaboration across multiple parties”
He continues to mention: “As the oil and gas industry increasingly leverages sensor technology across upstream and downstream assets, the ability for blockchain to store transactions and accounting data directly on these devices can compress process time by connecting assets directly to services contracts.”
Not only this, Blockchain, which was originally created to power cryptocurrencies, can also forge a system of a brand new foreign exchange which can reduce the additional costs involved in doing cross-border business.
Commerce and Government:
The whole framework of global commerce presents a clean opportunity for blockchain implementation. The blockchain is more convincing in this sector as it has a power to create a borderless network architecture, which can enable cross-border transactions instantly. The best part is that it can remove the now-necessary and tiring steps of several approvals. In short, the whole cost of trust that is now heavy on commerce industry can be dropped. Removal of middlemen, transaction fees of SWIFT and delays can materially diminish.
Moving towards the Governments, which are always charged with a host of duties and responsibilities can be now (finally) be discharged for the benefit of citizens. How? Blockchain can be used for safeguarding state and financial services, also assist in establishing unique identity management systems, enable safe document processing, and secure transmission of sensitive information. Since efficiency is the main problem Governments face, and painfully, all the potential progress is slowed down by bureaucratic red-tape, Blockchain can eliminate countless man hours and create a digital ledger of secured information which will be untouched and uncorrupted.
Dealing with the consistent Disruption:
Information is power and Blockchain has a huge potential to increase the amount of information available. New leaders will find a way to access this hidden information packed in forms of data and further analyze it, which will always be at a risky game. Since Blockchain disruptions are already happening, no denying in that; it cannot be entirely assured that it is secure and unhackable which means that the probability of a hack and data exploitation is undoubtedly high.
Since Blockchain is still fragile yet powerfully promising at this stage, industry leaders feel their current dominant positions as challenged. Coming to the most plausible part, Blockchain – a provider of an automation system built exclusively for reserving authenticity of businesses, is capable of making many career paths obsolete eventually creating new ones for the generations to come.
Chances of outside attacks are more than half:
Since Blockchain is so far theoretically enduring; meaning, the past records lying on the whole network is incorruptible, the chances of the whole network to increase in size is evidently high. However, not all Blockchain application needs to be established on a large scale network; this alone fact unlocks the probability of an outside attack by a good 51%. Speaking technically, a 51% attack is a situation where a group of nodes that controls a 51% hashing power of the entire Blockchain network; a simple code manipulation can ruin the whole network. The consequence of the same is a recipe for disaster.
Blockchain and Environmental regulation:
The whole Blockchain implementation requires several systems located at different places owing to its decentralized rule, this alone, contributes to the fact that a lot of electricity is required to power it. Since the whole Bitcoin network is already utilizing tons of energy, this burden will eventually become considerable and later debatable. A large-scale implementation of Blockchain will soon invite a lot of opposition from world leaders and that day won’t be far, where ugly politics gets woven in it.