At the risk of reinforcing the industry’s reputation for hyperbole, the advent of blockchain technology probably ranks up there with some of the most influential technological developments of the 21st century. Propelled into the mainstream by the crypto craze of recent years, blockchain has become a symbol for the wave of disruptive novel technologies changing the world as we know it. However, blockchain is more – so much more – than just cryptocurrencies and making a quick buck. In short, blockchain can be a catalyst for myriad novel business applications, and the time has come to explore the possibilities that lie beyond.
To be sure, crypto remains the most widely understood application of blockchain technology; at the heart of which lies the notion of decentralization and greater autonomy from traditional financial institutions. Increasingly, however, different use cases for blockchain have emerged, which begs the question: can blockchain and crypto instead be integrated into the financial industry, or even supplant traditional modes of transacting?
Even today, however, blockchain is a subject that often attracts controversy, and public sentiment towards blockchain and crypto can be volatile; as a result, mainstream acceptance of blockchain and crypto remains a distant goal. Any concerted effort to achieve this target will be contingent on the blockchain industry’s ability to demonstrate a compelling use case for the technology that can be adopted without prohibitive cost, and that is reliable and scalable. Here, I present four potential use cases for blockchain technology that warrant greater exploration and investment.
The transfer of money has always been an expensive and slow process – a problem that is particularly salient in cross-border payments. Blockchain technology is able to speed up and simplify this process, while also significantly reducing costs. Even today, the costs of remittance are substantial, starting from 2%. Blockchain technology potentially reduces cost to zero and provides guaranteed, real time transactions across borders.
In a similar vein, the ability of blockchain to bypass middlemen in the process of transacting can fundamentally reshape the future of shares trading and other similar financial processes. Creating a decentralized and secure ledger – a blockchain – that gives every party a say in the validation of a transaction, speeds up the settlement process, allows for greater trade accuracy, and cuts out ‘middlemen’ such as brokers. This not only reduces costs for all parties, but also enhances efficiency. In the near future, blockchain technology can also lead to the advent of decentralized stock exchanges, eliminating the need for a central system to bring supply and demand together.
Another promising application of blockchain technology is the smart contract, which can execute commercial transactions and agreements automatically. It also enforces the obligations of all parties in a contract – again, without the added expense of a middleman. The benefits are obvious: blockchain technology is secure, so smart contracts have the potential to offer more security and reliability than traditional contract law. Also, they can reduce transaction costs associated with contracting, since blockchain technology – again – eliminates the need for middlemen.
A fourth use case of blockchain technology is online identity management. Once again, blockchain technology renders any middlemen obsolete, and can provide every party in the network access to the same immutable ‘source of truth’, via a decentralized ledger. When identity management is moved to blockchain technology, users are able to choose how they identify themselves and with whom their identity is shared.
The seemingly endless possibilities for novel applications using blockchain make for an incredibly exciting future; a future defined by innovation and invention. We are ushering in a new technological epoch, and 6X aims to be at the forefront of this revolution for years to come. (Vanessa Koh, International Vice President of 6X Digital Asset Trading Exchange).
