How Blockchain Technology Will Change the World

If you haven’t heard about Blockchain technology, you've probably been living under a rock. Blockchain is the most revolutionary technology of our time. It has the potential to change the world in ways we can’t even fathom. More than technology, it is a concept that will change the basis of how businesses run in our world. And if you don’t want to be left in everyone behind, you need to get updated straightaway.

Before we dive into the “whats” and the “hows” of Blockchain technology, it is important to understand a few points that will make its importance clear –

1. Blockchain is early, like the Internet in the 1990s, but it could be as big.
2. Unlike eCommerce, social media or email, Blockchain is not a use-case of the Internet, but rather something as fundamental, and parallel to it.
3. It can potentially change our lives in the next 15 years, the same way?the Internet has done in the last 15 years.

What is Blockchain?

Now that we have understood how big it is going to be in the coming future, the question is – what is Blockchain? To put it simply, Blockchain is a digital ledger that is accessible to all and easily verified. In other words, it is an immutable, distributed, decentralized; peer-to-peer ledger replicated across multiple nodes connected in a network, making it possible to record data about any event or transaction as it happens.

Not to scare you away with the technical terms, here is a simple analogy of Blockchain – think of it as a “kitty party”! We all know what a kitty party is; a bunch of women, usually, get along, have fun, play some games and exchange money. This money part is important – these women put in some money each, and then give that money to one member at a time. If there is no boss, and no intermediary, then how is the transaction happening? These women are trusting each other and also trusting the fact that if they are to be defrauded, then most if not all of them have to be influenced. This changes the mere concept of trust from being centralized to distributed. This is where the women become the nodes or the blocks, and the kitty party becomes exactly what a Blockchain is.

Now that we understand what it is and what it does, it’s time to finally talk about how it is going to change the world. Blockchain’s application is not at all limited to cryptocurrency; in fact, cryptocurrency is not even the tip of it. Blockchain is rapidly finding a place in any domain that you could imagine. So, let us take this article forward, one domain at a time.

How Blockchain Technology Will Change Finance -

When financial institutions start digitizing their work through Blockchain, it will create a new paragon where there will be value at every point of contact. Blockchain will help to ensure data integrity and safety and enable real-time settlement, audit and reporting. Understanding this change, Indian Banks are also putting in the effort to leverage Blockchain technology. 18 banks in India, guided by The Reserve Bank of India (RBI) itself have initiated the Indian Bank’s Blockchain Infrastructure Company Private Limited (IBBIC).

The major changes that Blockchain promises to bring into Finance are –

1. Facilitation of global payments improves real-time gross settlement between central banks, commercial banks and independent banks
2. Digitization of assets reduces operational risks of fraud, human error, and overall counterparty risk
3. Digitization of portfolio improves governance and transparency for investors and stakeholders
4. Automated documentation, credit prediction, and syndicate formation reduce operational risks of banking
5. Tokenized reinsurance market facilitates policy reinsurance in open marketplaces.

How Blockchain Technology Will Change Supply Chain Management -

Blockchain technology is presenting promising and proven opportunities for improvement across the supply chains of the world. It has the potential to deliver tremendous business value by increasing supply chain transparency, reducing operational risk, and improving overall efficiency. Its applications are already evident as companies like Walmart, IBM and BHP are now using it to trace a variety of items accurately and efficiently.

The major changes that Blockchain promises to bring into Supply Chain Management are –

1. Replacement of slow and manual processes involving large and complex datasets like in the shipping industry
2. Strengthening the traceability of products to mitigate the high cost of quality problems, such as recalls, reputational damage, or the loss of revenue from the black market
3. Reduction of supply-chain IT cost by improving the process of transactions and managing their scale.

How Blockchain Technology Will Change Sales and Marketing -

Customer-centric marketing is crucial for firms that want to survive in the madly contested B2C environment. In the new world order, brands are no longer focusing on running campaign after campaign. Instead, they are capitalizing on new forms of consumer engagement to extend their consumer base and enforce synergistic strategies.

Blockchain promises to be of great help in Sales and Marketing by –

1. Enabling disintermediation to replace conventional trading mechanisms and the new intermediaries born due to the Internet and hence, limit or remove costs and eliminate non-value adding activities at the intermediation layer
2. Changing the online presence of consumers and brands alike into an open and collaborative environment that prevents various risks such as click frauds that jeopardize online advertising’s effectiveness
3. As Trust is at the heart of Blockchain, such a marketing infrastructure can reinforce the eroding trust and transparency and hence, increase the vitally important consumer confidence in the B2C environment

How Blockchain Technology Will Change Human Resources -

If we look at the current scenario, Blockchain has barely made its case in HR, but it still promises to play a huge role in the long-term future. As Blockchain has progressed to provide trust, security, privacy and transparency, it is now becoming critical for HR management issues such as payroll, recruitment, employee verification, and contract management.

Here’s how each of those applications plays out in HR –

1. The payroll process can be streamlined by automating and securing payments to employees, contractors and vendors. Looking into this, ADP, one of the biggest payroll providers is now developing a blockchain application
2. Recruitment process can be tokenized for credentials and transcripts with assurance about its safety and authenticity. Many universities have now begun providing students with records in blockchain format
3. Employee’s personal information can be encrypted and stored on a blockchain, providing immutability and a secure governance system. This will also ensure the veracity of the information
4. Smart contracts by blockchain can transform paper contracts into immutable, transparent digital contracts to enforce terms and penalties.

We have barely begun to scratch the surface of Blockchain technology. It won't be long before innovators in industries besides those mentioned above discover new and unique ways to tap into the world that is yet to be imagined. As you can see the impact of Blockchain technology, now you know just ‘How Blockchain Technology Will Change the World’.

If this article interests you and you want to learn more about this upcoming revolution, feel free to start a conversation with me!?