Blockchain is a transformational technology that will reinvent the way that we do business with each other. Many of us had already heard about Bitcoin, well, Blockchain is the key technology behind Bitcoin.
On the other hand, Blockchain can be useful in many other industry that has an asset, which it needs to be transacted within a network based on a contract and registered in a ledger.
So, not only the financial industry will be affected by Blockchain but many other industries as well, it will open new spaces to business reinvention.
Definition in a nutshell
Blockchain is a distributed transaction database, which is not the “sexiest” definition that we may use to convince our sponsors. However if I say that Blockchain has the ability to keep the transactions shared and secured, eliminating the need of an intermediary, i.e. banks, regulators, reducing risk, cost and increase speed
Blockchain has sufficient capabilities to support a global trusted network with decentralized, immutable ledger that records each transaction. With an simple and decentralized architecture, we may address the main reasons that will support business disruption; Trust, Fast and Low Cost transactions.
The transaction history at the society is elder than the monetary system, as you probably was taught about barter trade in your history classes at the elementary school. Since that time, the physical trade demands trust that were based in our local reputation. The essence of trust stills on the transaction success, since the beginning. The lack of trust would avoid a transaction to happen.
Today, with the digital age, we tremendous amplified our social contacts from local to global and increased the business opportunities as well, on the other hand it is more complex to recognize trust in the internet, which withdraw a lot of transactions opportunities. According to this recent study, digital payments are expected to reach a record 726 billion by 2020, and no-cash transactions rose 11.2 percent, between 2014 and 2015, the highest growth of the past decade.
Low Cost transactions
The blockchain system will simplify the transaction process providing an end-to-end automation where the contracts and the transactions will be digitalized and stored in a transparent distributed ledger. Imagine that we may be able to eliminate the expensive intermediary costs, i.e. lawyers, bankers, brokers.
A great trader leader in Oil & Gas Industry announced interest in blockchain technology due to their operational savings.
The lack of intermediation need drives to a frictionless process or a lean transaction. Which may reduce the process bureaucracy time enhancing the accuracy with less errors and human intervention.
Considering a recent announcement by IBM for Global Transactions, in which blockchain is estimated to tremendous speed up the process transactions in 60%.
Blockchain and the Hype
Although Blockchain supported Bitcoin for years, just now the big companies are putting efforts on technology study and application to their business. Many other companies already launched services using blockchain and it’s distributed ledger architecture.
If you considering the potential change that blockchain can support to the existent asset transactions process, we are really at the beginning. Nevertheless, like a tsunami the water is rushing away from the shore, now it is a matter of time to the tsunami arrives from the Ocean.