Forecast Works Well: Blockchain Is Being Widely Adopted

It seems the optimism and enthusiasm about the adoption of blockchain have been growing as more and more industries explore the potential of this nascent technology.

Back in 2016, research on the investment industry conducted by State Street Corporation in collaboration with Oxford Economics showed that 57% of asset owners and asset managers believed that Blockchain technology would be widely adopted in the next five years.

Moreover, 80% of respondents noted that distributed ledger technology would have the greatest impact on IT departments. Thus this would affect the need to introduce new skills necessary to adapt to new technical demands.

Now, when the most part of the predicted 5-year term has already passed, it seems obvious that the forecast was quite accurate, as the technology has indeed transformed and improved many industries beyond finance and cryptocurrency.

Ensuring transparency and traceability

As blockchain might offer various benefits ensuring transparency, traceability and security, many traditional industries that were previously lacking the above-mentioned properties explore its potential now. For instance, various industries have applied the technology to boost their supply chain, for it helps to track any kind of product through all stages from raw materials choice to the shop the ready-made product ends up.

In particular, such a feature is important for industries where manufacturers need to protect their products against counterfeiting. Thus, the Italian Ministry of Economic Development (MiSE) initiated the Made in Italy project back in 2018. According to CoinIdol, a world blockchain news outlet, the initiative is aimed at protecting the authenticity of Italian goods from counterfeiting when marketed abroad.

Presently, Italy is a leader in applying blockchain for supply chain optimisation. Its luxury carmaker Lamborghini is planning on applying blockchain for certifying and verifying vintage cars to protect them against counterfeiting. Other companies operating in the country are also exploring to boost their supply chains as tracking the product history might be very important for ensuring its quality.

Security that matters

For instance, blockchain has become quite popular in the agrifood industry, as it allows the quality of raw materials. An Italian producer of baby food Mipaaft applied the technology to track its supply chain, as quality and security of raw materials are crucial for the industry. A company named Auchain applied the technology for tracking the quality of carrots.

These are far from being the only industries striving to boost their supply chain with innovative technologies. Global automotive giants such as BMW, Mercedes-Benz, General Motors etc are making efforts to ensure traceability of each and every detail used in their vehicles.

Healthcare industry also embraces blockchain technology to protect itself against counterfeit goods. Especially now, when the world suffers from the COVID-19 pandemic, the authenticity of protective equipment and drugs may cost many lives. In early 2020, many countries worldwide turned down a large batch of counterfeit and low-quality medical equipment from China. This prompted industry startups to explore the potential of blockchain technology for ensuring traceability and quality.

Thus, the general investment in adopting blockchain for healthcare is expected to rise to $5.61 billion by 20205, with about 55% of the industry application to be based on the technology by that time.

Granting rights

Another branch where the technology can disrupt the proceedings is ensuring property rights, with a special focus on intellectual property. In this age of rapid digitization, it is quite difficult to ensure the protection of copyright for content creators, be that musicians, song or fiction writers, video makers or artists.

However, as blockchain is immutable and secure, the information recorded on the network can not be changed or forged. This allows content creators to ensure their authorship and right to the works of art they produce without needless bureaucracy. Besides, as blockchain is decentralized, no single person is able to access the records except for the person that has made them, provided that this person has one’s private key.

Presently, many startups offer copyright registering services for authors, musicians, artists etc. Besides, there are also numerous blockchain-based streaming and content sharing platforms offering extra benefits, such as the absence of censorship and the possibility for direct interaction with advertisers.

Similarly, the technology is being used to protect other property rights as well, including the rights for real estate and land property. This is especially important for countries with high levels of corruption, where data from state registries are often forgotten for the purpose of an illegal seizure. Owing to its decentralized nature, blockchain is able to eliminate such a possibility.

Merging traditional and digital finance

As the technology was born for finance, the industry remains the core one for its adoption. It serves as an alternative to the traditional sector to reach those unbanked and underbanked. Indeed, in some developing countries, blockchain and cryptocurrency payment services have become mainstream.

This has probably pushed global finance giants including Visa and Mastercard to explore the possibilities of blockchain technology. The latter company has recently concluded a new partnership to expand its digital finance project. Visa has launched a blockchain-based platform B2B Connect back in 2016, and now is seeking an engineer with the knowledge of Ethereum to further enhance it. No wonder, because blockchain is able to save them up to $12 billion in operating costs per year.

Some banks also offer blockchain and cryptocurrency services to keep pace with the progress. For instance, Bank Frick, a financial institution based in Liechtenstein, has chosen USDC stablecoin for cross-border transactions instead of SWIFT. Considering the fact that blockchain is able to save up to 30% of the cost of banking infrastructure, it is anticipated that even more financial institutions will be pushed to adopt the technology.

Curiously, the majority of banks are still cautious about cryptocurrency despite exploring and adopting its underlying tech. One of the brightest examples of such an attitude now is India. While its Central Bank does its best to ban cryptocurrency, and businesses mostly avoid dealing with crypto assets as they try to escape scrutiny, the country’s blockchain community seems to grow. In early 2020, the Indian Union Minister for Law and Justice Ravi Shankar initiated the launch of Blockchain Innovation Hub in Bengaluru.  

Further adoption expected

As the growth was significantly triggered by the COVID-19 pandemic and forced digitization of human society, it is unlikely to stop after the lockdown is cancelled. On the contrary, blockchain is expected to grow even further.

According to the research by TechJury analytics service, the number of registered blockchain wallets in the first quarter of 2020 increased to 47.14 million with further growth expected. The overall investment in the industry is expected to grow to $11.7 billion by 2022. In its turn, this will push the annual revenue to $20 billion by 2024.

Therefore, we are likely to see even bigger growth in the next five years, as new use cases for blockchain have been revealed and various industries do justice to its prominent advantages. Considering the growing number of scams and cybercrimes, it is also anticipated that the technology’s immutability will become a remedy against the rising illegal activity. 

Updated by: Lana Smiley