When will blockchain finally shift from potential to reality?
Thursday, February 01, 2018
In 2009, a Japanese man named Satoshi Nakamoto apparently invented both the first blockchain database and the world's first cryptocurrency, Bitcoin. There are various theories about who Nakamoto really is, or whether Nakamoto is actually a group of people. He has never identified himself.
Whatever the case, Nakamoto is believed to be a billionaire several times over — even as the Bitcoin has lost roughly half of its value since its incredible high of nearly $20,000 "per unit" in December.
It's possible that in the future, Nakamoto will not be known to the world as the creator of Bitcoin and its billions in market capitalization, but as the founder of blockchain technology. While it's unlikely that the cryptocurrency will get back to such a gaudy price soon, blockchain has the potential to change the economy in a number of different sectors.
But as blockchain nears the beginning of its second decade, a question worth asking is, "When will blockchain finally shift from potential to reality?"
There are many available explanations of what blockchain is, but the chief relevant aspects to industry are that it's a type of decentralized, open-source database. It keeps records of every transaction made to the database (a "block") and broadcasts the transaction to the database.
That means that it's a highly secure way of keeping records and could be used with basically any industry to verify contracts or agreements. One common comparison made for blockchain is as a sort of more advanced version of Google Docs.
In February 2014, Jacob Aron of New Scientist wrote an article titled, "Bitcoin: How its core technology will change the world." A couple months later, Business Insider ran a similar piece about blockchain.
At TEDSummit 2016, Canadian businessman and consultant Don Tapscott went so far as to open up his talk by saying, "The technology likely to have the greatest impact on the next few decades has arrived. And it's not social media. It's not big data. It's not robotics. It's not even AI. You'll be surprised to learn that it's the underlying technology of digital currencies like Bitcoin. It's called the blockchain."
With all that hype dating back several years, one could come to the conclusion that the exciting potential has been in a bit of a holding pattern. Yet there are good reasons for why blockchain hasn't become a force outside of Bitcoin and other cryptocurrencies like Ethereum.
"The enterprise blockchain market is experiencing a chicken-and-egg moment," said Emily Vaughn, blockchain product development director for Change Healthcare, a healthcare IT company that recently began using blockchain in its claims management system.
"To demonstrate value and achieve high-growth conditions, the blockchain-enabled solution needs users and network effect. In order to get users and network effect, the blockchain-enabled solution needs to demonstrate value."
Tapscott himself conceded in early January, "despite the awesome potential, blockchain is a long way off from changing the world. 2018 will be the year where the tremendous innovation and promise of blockchain must become real."
While blockchain hasn't really changed the world besides making cryptocurrency and Bitcoin relatively common terms, blockchain will be used in nonvirtual currency applications more in 2018, and probably enough to prove Tapscott prophetic.
"The opportunity is not just to solve problems that have slowed down business, for example in claims lifecycle transparency," Vaughn said. "The greater opportunities are the new services and applications that will emerge from having high-integrity information between companies, such as a real-time fraud detection service during a claim's submission."
It isn't just in healthcare tech that blockchain appears to be making momentum this year. The uses of blockchain are being explored or developed in areas as wide-ranging as television, retail, public services, transportation and even human rights.
Vaughn also believes blockchain will be implemented in many networks' back-end applications without users knowing about it or it having a consumer-facing side. For the healthcare world, she thinks an application like a patient health wallet or payment service built with blockchain will take "maybe five to 10 years to see widespread adoption."
It's understandable that some are beginning to question whether we'll ever see the benefits of blockchain come to fruition. However, that "revolution" will take time to implement, and it's being developed currently — even if consumers can't see it yet.
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