According to Brock Pierce, the Chairman of the Bitcoin Foundation, blockchain will change everything even more than the Internet. Thus, he stresses the significance and relevance of this technology for modern businesses. Indeed, this innovation changes the way data is stored and transmitted. It offers a more secure and trusted model of communication between network participants and increases the efficiency of processes related to money, people, and information. 64% of professionals believe blockchain will positively impact their industries. Distributed ledger technology transforms the way companies operate, but how and what blockchain trends exist on the market? Let’s find this out together.
Blockchain usage statistics
Blockchain is a revolutionary technology based on a distributed database. Records and transactions made by network members stores in special “online logs” (blocks) and reproduces among users. Each block is encrypted and linked to the rest of the blocks in the chain using a cryptographic function called a hash. There is no centralized server on the network. Also, blocks distribute across nodes (devices that store information about the blockchain).
Secret Keys and Contracts
Users receive unique secret keys – digital signatures that confirm the registration, processing, and verification of each transaction. Participants act within the framework of a common consensus, and the terms of the agreement are automatically implemented with the help of smart contracts. Users simultaneously function as members and “mini servers.”
Due to such structural features, blockchain is considered one of the most reliable and efficient technologies. The information in the block cannot be changed or faked. One needs to try billions of combinations to crack a block and identify a hash. Certainly, this requires a very powerful computer and a lot of time. Even if the attacker knows the key, they will only get access to one block in the whole chain. The smart contract will notify other participants about the violation of the terms of the agreement, and they will prohibit unauthorized transactions.
Companies, enterprises, and institutions from different sectors of the economy see great business potential in blockchain and blockchain trends. Therefore, they are heavily investing in blockchain application development for financial management, documentation, or digital identity. According to Statista, spending on blockchain solutions is skyrocketing nowadays. In 2021 businesses spent about $6.6 billion on them. And by 2024, investments in blockchain solutions will amount to $19 billion.
The banking industry, continuous and process manufacturing, retail trade, and professional services are leading in the implementation of blockchain in the European market.
Indeed, a similar gradation is observed in the world market. Digital currency, monitoring, and data management are popular blockchain trends and use cases.
Blockchain use cases
Ginni Rometty, the IBM CEO, notes the versatility of blockchain: “Anything that can conceive of as a supply chain, blockchain can vastly improve its efficiency – it doesn’t matter if its people, numbers, data, money.” Therefore, various sectors of the economy are adopting blockchain and blockchain trends for business purposes.
Banks seek to reduce time, costs, and friction in capital markets. Financial institutions want to use blockchain for the following operations:
- Payments and transfers. Digital money sends instantly and securely anywhere in the world. In this case, the transaction fee is less than with standard transfer methods.
- Keeping money in bank accounts. Customers open savings accounts and deposit money with the bank. Partially reserved, the rest is put into circulation. If holders start withdrawing funds at the same time, clients risk losing money.
Bank accounts can run on blockchain technology. A blockchain network protects money from hacker attacks. A participant can freely view the history of operations on their account. In addition, the blockchain protects the bank from a massive “influx” of clients when numerous customers want to withdraw money. Developers can provide withdrawal limits in smart contacts to avoid default.
- Securities trading. In order for the purchase of a share to take place, it is necessary not only to transfer money to the shareholder but also to confirm ownership and register the asset. This means additional costs for exchange duties and clearing services. If an order is large, the commissions are significant. When ownership writes into the blockchain, it becomes easier and cheaper to transfer it. It is enough to make an entry in the block and pay a small commission.
Manufacturing and logistics
Enterprises generate a large data set and documentation at all stages of manufacturing, from the creation of products to their delivery to the end-user. It is rather difficult for participants in the supply chain to track what happens to the object at each stage. Additionally, difficulties arise in determining how many units of goods are delivered, as well as establishing blame if some of the containers get lost or damaged along the way.
Blockchain brings to the supply chain what it lacks – the transparency of logistics processes. All network participants are in the blockchain, from the raw material producer to the consignees. Additionally, any manipulations on the product and transactions are recorded in blocks in chronological order. Each user sees what happens to the product at a certain moment. Also, the data cannot be faked or changed. If a product is lost along the way, it is easy to determine at what stage it happened and who is responsible for the incident.
End-users (buyers) can also track the path of the product to the store counter. For that purpose, they read the QR code affixed to the product they want. Thus, they make sure that the manufacturer fulfills all obligations and delivers a quality product.
Today, healthcare generates 30% of the world’s data.
With this amount of information, it is difficult for medical institutions to record and communicate patient information. When a patient visits a clinic that does not have their medical card, they must request information from the medical center where they are constantly served. If any data is lost, the doctor will not be able to restore the patient’s medical history and evaluate the effectiveness of previous treatment.
Blockchain simplifies the storage of medical history. A chain of blocks represents the medical record, where each clinic will add a new block with information about the treatment. Even if the patient ends up in another hospital, they will be able to give the doctor temporary access to blocks with their medical history. No need to wait for documents from the previous clinic. Information is available in any corner of the world.
Blockchain will free medical institutions from data administration work. As a result, it will give healthcare professionals more time for implementing innovative technologies and improving patient care. This is one of the blockchain trends of the future.
Retail also faces numerous challenges:
- customer requests are rapidly changing and difficult to predict;
- it is difficult to retain consumers;
- it is not easy to build communication in a large network of enterprises;
- retailers are lagging behind in technology adoption;
- dishonest sellers sell fake goods instead of originals;
- cyber scammers attack online stores to steal the personal data of customers.
Blockchain applications help to solve these issues in the following ways:
The technology unites warehouse managers, manufacturers, suppliers, and sellers into a single network.
Participants “communicate” with each other through transaction records. They see how many units are produced, how many are requested by users, and how many products need to be ordered to respond to future demand.
Blockchain protects the personal data of buyers.
In an application with a centralized server, it is easier for an attacker to steal customers’ credit card or bank account information. If the seller fails to protect buyers, they will not only lose their audience, business, and reputation but also get a serious fine.
It is not easy to steal data in a blockchain application. A cryptographic code protects the block of a chain participant. Plus, it is independent of others. To approve a transaction, the user needs a unique secret key that is also not easy to guess. Even if an attacker cracks one block, they will not gain access to the rest of them. The participants in the chain will see the anomaly and will cut off the scammer at the very beginning.
Blockchain protects customers from counterfeit goods.
Leading companies (for example, Walmart and Nestlé) strive to openly inform consumers about the origin of their goods and products. To do this, they place a QR tag on the goods, by scanning which, buyers can trace the entire path of the product through the supply chain. Thus, they may check the authenticity and quality of products.
It supports smart loyalty programs.
Some stores offer inconsistent reward programs. Errors occur when a client cannot use the points they have earned. Merchants can program rules in the smart contract so that users automatically get points for completed actions.
The education sector is just beginning to unlock the potential of blockchain and it could be a big part of the blocktrain trends. According to Gartner, in 2019, only 2% of universities used this technology. Leading universities, colleges, and schools are practicing blockchain instead of grade books or diaries. Records of academic progress store securely in blocks.
When the owner allows access, they allow viewing of their records by the rector, director, teacher, or other authorized persons of a particular institution. They see what courses this student has taken, what mark he or she received in the exams, and what specialty he or she has mastered. A blockchain-based digital diary or diploma simplifies the data verification process when transferring to other educational institutions or applying for a job. Blockchain ensures that a student or applicant does not lie about their education.
Latest blockchain trends
The pandemic has held back the growth of blockchain investment. But after businesses adapted to the new conditions, they began to invest heavily in this innovation. Statista found that there was more technology investment in the first quarter of 2021 alone than in 2020. There are clear trends in the market:
- The financial sector is leading in blockchain implementation. Banking alone accounts for 30% of global technology spending. Adopting the innovation will help financial institutions to reduce the cost of infrastructure by $15-20 billion.
- The demand for blockchain specialists is growing. Linkedin’s 2021 THE GLOBAL BLOCKCHAIN EMPLOYMENT REPORT found that employers are 33 times more likely to seek out blockchain developers. The demand for specialists with knowledge of blockchain is growing at a rapid pace – by 300-500% per year.
- Global digitization of documentation. Chetu predicts that government institutions will begin to replace paper documentation with distributed digital data systems. Blockchain facilitates the transfer of documents between organizations with minimal risk of system hacks.
- A new economic model. International trade is a complex and inefficient process. It is not working as quickly as we would like due to fraud, legal restrictions, and other complicating factors.
If digital currency and blockchain improve this model, it solves many problems. A unified digital system will operate with a common method of payment and paperwork. Also, suppliers and merchants will trust each other more, and it will be difficult for fraudsters to carry out illegal transactions. Certainly, smart contracts and monitoring automate the implementation of legislation.
Blockchain is a promising technology that improves the way individuals and organizations interact. It gives businesses the missing puzzle pieces in business operations which are security and transparency. If you want to build business processes better than your competitors, it’s time to think about following blockchain trends and introducing innovation into the workflow of your company.