The Rise & Rise of Blockchain

Summary

Cryptocurrencies, based on the blockchain, took off in  2021, at one stage reaching US$3 Trillion and this blog relates to likely future applications. You may have noticed the increasing newspaper commentary. Unfortunately, most reports are inevitably about Bitcoin because it is the original and biggest crypto. However, about 11,000 so called Altcoins (Alternatives to Bitcoin) now exist, many with exciting applications, the majority not related to currencies! 

Blockchain technology is revolutionary and is here to stay. It simplifies and sets data in padlocked stone at near zero cost. Some of the more likely applications are detailed below. See also the earlier blog which explains the mechanics of blockchain. CBDCs (Central Bank Digital Currencies) are explained here 

The video and text below detail some applications.

Globalisation

Separate country currencies are costly because of exchange rates and bank charges, up to 6%!. A single world currency, be it a dominant CBDC (Central Bank Digital Currency) or a cryptocurrency would avoid these charges. It has been done with the Euro.

Security

Security, alongside almost zero cost, is the most important feature of the blockchain. Even now programmers are designing firmware to counter the advent of quantum computers. Millions of computers need to be hacked in an impossibly short period.

We read much about people that lose their cryptos to hackers. This is normally via crypto exchanges that don’t have a blockchain base (although that is changing). Also where users don’t use 2FA (2 Factor Authentication). Just like hacking of bank accounts. Nothing to do with blockchain technology. Storing cryptos in an offline hardware wallet such as Ledger is the safest way.

Below are sample applications. For more, see References below.

DeFi

Decentralised Finance is a big application of blockchain and is threatening the ‘business as usual’ way banks work. Many forward thinking banks, such as the Commonwealth in Australia are getting involved, rather than being left behind.

DeFi allows people without access to banks (more than 1.7 Billion), to transact with anyone. It also simplifies transactions and reduces costs for everyone. DeFi normally runs on the Ethereum platform, which soon will change its ‘Proof of Work’ way of mining and transacting to ‘Proof of Stake’. This will dramatically reduce power consumption and cost.

Non Currency Applications

Blockchain applications go way past cryptocurrency and Bitcoin. They create more transparency and fairness and save businesses time and money, The technology is impacting many sectors from how contracts are enforced to making government work more efficiently.

Insurance

More clarity for customers and Insurance companies. Recording all claims on a blockchain stops duplicates. Smart contracts speed up claimants receiving payments.

Voting

Stops voter fraud. Governments will be slow to introduce because of digital illiteracy, but a hybrid system would be a good idea to get it rolling and eventual dominance.

Medical Records

Provides privacy and unalterable accuracy

Authenticity of Anything

Accurate and unchangeable record keeping of original artworks, pharmaceutical drugs, NFTs and anything unique.

Real Estate Transactions

Reduces paperwork, transaction time and keeps all recordings accurately.

What About Volatility?

Governments don’t understand cryptos and consequently are slow to regulate them. This and the general uptake of cryptos through ETFs (Exchange Traded Funds) will do a lot to reduce volatility. The US Federal Congress is trying hard to get a grip on the blockchain and the series of videos below is enlightening!

Other blockchain congressional hearing videos are:

• https://youtu.be/ux6CmsrOFeo
• https://youtu.be/pSTNhBlfV_s

The blockchain is complex, so if there are questions you have, ask in ‘Comments’ below.

References

• Motley Fool
• Google
• Bernard Marr
• 34 Applications Disrupting Status Quo

Please follow and like us: