If it’s not Artificial Intelligence, it’s cryptocurrency; and if not that, then it’s net neutrality. There is always a buzzword wrapped in hyperbole for any technology that’s on the cusp of taking off. And yet, while we view these technology hype cycles with a cynical eye, there’s one technology that will have a lasting impact on the way we live and work – blockchain.
Most people think of blockchain in relation to underpinning the bitcoin cryptocurrency. The reality is that the impact of blockchain, due to its nature of allowing people to securely share digital assets, will reach many of the business and consumer sectors around us. There are thousands of blockchain definitions, but essentially information on a blockchain is a shared and constantly reconciled database – a digitally distributed ledger – across thousands or millions of computers, which means it’s open to all and easily verifiable. Trust is created because there is no central owner or repository – it’s owned and verified by the network. Blockchains can be open or private and all users have a record of the transaction.
The impact of blockchain on the legal sector has been much discussed because the technology is so applicable to a sector where security and authentication are intrinsic. Financial services, banking, and real estate have also been the forerunners to adopting the technology, even in its embryonic stages, for similar reasons. But it’s not just professional services firms that are looking at the technology with growing interest. According to the PwC report Blockchain is here. What’s your next move?, 84% of the 600 executives polled said they have blockchain initiatives underway, with 25% having a pilot either in progress or fully live. Momentum around the technology is shifting from initial exploratory toe-dipping to bona fide business applications. Below, we discuss some areas, new and more established, where blockchain is already changing the narrative.
While it might currently just be the niche players or the behemoths with budgets to spend who are seriously investigating the impact of blockchain in our sector, the benefits of the technology have been much lauded. From highly secure evidence storage for documents, through to smart contracts that are automatically triggered once specific criteria are hit, without human interaction. Law firms are already using the technology to navigate insurance claims, secure IP rights and initiate real estate transactions.
Do you know where your high school graduation or higher education certificate is? MIT became the first university to offer students the ability to get their diplomas via an app as well as in the traditional method. The reason? Those certificates were secured on a blockchain and are a secure, quickly verifiable way for the students to share results with schools and employers. The education sector is increasingly seeing the value in using blockchain to issue secure qualifications so employers can automatically verify the validity of their potential employees’ educational claims. But it goes beyond just security and verification. A report by the European Commission on Blockchain in Education found that in the not too distant future universities will be using blockchain to help reduce the cost of data management internally and students will be paying their fees in cryptocurrencies.
Blockchain’s primary property is tamperproof security; so when it comes to healthcare this might not just save millions of dollars in wasted tests, but it could also save lives. Currently, healthcare patients have records with multiple medical practitioners. These specialists have different IT systems that are not compatible, with no way of sharing medical records. When patients require urgent treatment, obtaining these records can be time-consuming. With blockchain, the patient has the key to their encrypted records which means medical teams could access the information regardless of where the patient is located. This means that insurance companies have less expensive duplicative testing to pay for; the patients know they are getting the best care according to their records; and the medical staff knows the exact state of the patient’s health.
According to a study by Deloitte, the impact of blockchain has already begun to take hold in the public sector. With pilots running in more than 12 countries, the study predicts that the technology will dominate in years to come. Initial pilots are focused around payments and currency, land registration and voting; although other projects underway include identity management and supply chain traceability. For example, in the UK in 2018 a scandal hit the food industry when some traces of horse meat were discovered in ready-made meals pertaining to be beef. Uproar from the public ensued. The UK’s Food Standard’s Agency has since started using blockchain to track the distribution of cattle in slaughterhouses and ensure compliance with agency standards. In the US, blockchain is being used to help everything from sharing patient medical data to protect information collected by Border Control.
Everyone is concerned that, when they donate to a charity, the money never gets through to those who need it most. Money can be misspent, or in some cases corruption disrupts payments getting through. Blockchain could change that, making every single donation 100% transparent with donors tracing their gift from initial payment through to when it’s spent. Confidence could be further regained in the sector using smart contracts on blockchain whereby funds would only be released to the charity once the work they’re doing has been verified to be having an impact. It’s not just about transparency – donations are already being made in cryptocurrencies, with one report from a charity foundation stating it received $69m in donations of cryptocurrency in 2017, nearly a tenfold increase from the previous year.
Despite the hundreds of use cases and the thousands of books and articles that blockchain has spawned, like any much-lauded technology, blockchain isn’t a smoking gun to solve the world’s problems. There are multiple challenges, from scalability to security and interoperability that blockchain must overcome before mass adoption can be expected. The point isn’t that blockchain can solve global challenges, but rather that it provides a cost-effective solution to many business issues that could impact our society as a whole. For example, analysts are predicting blockchain will save $15–20bn annually in the financial services industry alone by 2022. Imagine the impact on our schools and healthcare, for example, if those cost savings could also be replicated across these sectors.
While blockchain may not grab the public imagination in the way the burgeoning internet of the 90s did, the impact of blockchain behind the scenes from global business to the third sector to local societal institutions could certainly be more profound in the long run.