Since blockchain technology was first introduced, it has changed the face of various sectors worldwide. However, many believe that this is merely the start, with greater change coming in the near future. What else is to come? Join us as we delve deep into five industries that will likely be disrupted by blockchain technology.
What Is Blockchain Technology?
Blockchain technology is a public digital ledger that keeps track of various transactions. A majority of these transactions are peer-to-peer but have also been incorporated by businesses around the world. It is most commonly associated with cryptocurrencies, with some of these digital assets having their own blockchain.
Each transaction is represented with an ID, which is shown as a group of letters and numbers. This can then be searched through an explorer, such as Blockchair, for users to gather more information about the transaction, if and when needed.
Why online-based companies need to start using the technology
Blockchain technology will be a great advantage for both consumers and companies when looking at aspects such as safe payments online, something that will widen the consumer base within any online-based industry. It will also push the crypto and blockchain technology forward and result in more companies coming up with solutions on how this can be further improved, implemented, and adapted into new areas.
There is already a lot happening in this space which is positive but a challenge for online-based companies will be to keep up with technological advancements made in the blockchain area, or they run a great risk of becoming redundant. In a blog post by PartyCasino, examples of this can be shown, by companies that were ahead of their time in both software, hardware, and online solutions, but did not manage to adjust to the consumers’ needs and competitors’ movements on the market.
Examples of industries that will benefit from the technology
Below is a list of industries and areas that will see a significant change due to the technology, in years to come.
Blockchain technology can eliminate the need for receipts in the world of retail. No longer will employees ask for an email address, which can be used for those all-too-familiar onboarding messages. Users can simply make their payment and check the transaction later, from any device that has an internet connection.
Also, this technology ensures that payments can be made around the world, without the need for hefty fees. Most banks will charge 1-3% for every transaction made in a foreign currency. By using funds on a blockchain, this can be reduced to 0.001% and lower. In the world of blockchain, these are known as ‘gas fees’ and will vary depending on the chain used.
2. 3D Printing
Being a relatively new and innovative phenomenon too, it’s no surprise that blockchain technology can assist with 3D printing. One of the biggest talking points, in this case, is for streamlining the production of essential pieces and parts. By using a third-party application, all 3D printing processes can be traced and stored in a public place. This can be verified and checked immediately, without any way for this information to be tampered with.
Perhaps, one of the biggest draws to blockchain technology is people’s ability to take control of their funds. This is also true with cryptocurrency, with many investors believing that owning your own currency, digital or not, is the key to securing your finances.
If using a cryptocurrency, then users really can have complete control over their money. Obviously, this is good news for those that know a lot about security. Devices such as cold wallets have also been created, allowing users to keep a whole host of digital assets on something that is the same size as a USB stick.
These cold wallets, often sometimes called ledgers, can only be activated by trusted devices or anyone that knows the ‘seed phrase’ (Which is also commonly referred to as a ‘recovery phrase’). This phrase will consist of various random words, which will be detailed when setting up the device.
Users need to make a note of this phrase and keep it in a safe and secure location, to reference whenever they wish to move funds. It’s highly recommended that this is kept offline to deter hackers. Of course, this method is not 100% safe, but many studies have claimed that using a ledger is the safest place for storing digital funds.
4. Loans And Lending
There are many loan and lending companies that operate on the blockchain. Decentralized and centralized loans are both available, depending on the preference of the user. In both cases, crypto assets are used as collateral against the funds being lent. Also, in many cases, the loan will be based on the current value of the cryptocurrency used as collateral. Many people opt to use stablecoins, such as USDT, for this very reason.
Centralized loans are controlled by the company that is offering the loan. They will control all of the collateral, before distributing it back if payments are met. On the other hand are decentralized alternatives. These are based on a smart contract, which can take funds automatically if repayments are missed.
In almost all instances, the financial history of a potential customer will be checked, either through a traditional credit score or on the blockchain itself. This can help the company to decide the potential risk of a loan, allowing them to make the appropriate changes to the agreement if needed.
Since the introduction of blockchain technology, there is no need to use a bank account in order to transfer funds. There is a wide range of apps that can do this without the need to link a registered bank account. This makes peer-to-peer transfers even easier, with the only requirement being the wallet address of the recipient!
There are a handful of apps, including the likes of Request Finance, that allow other banking-style functions to be carried out on the blockchain. For example, funds can be requested for work that has been completed in the past. Other apps for recurring payments exist too, which are almost identical to direct debit payments that are often used for memberships and bills.
Finally, tips can also be universally accepted on the blockchain. This is perfect for anyone that makes online content, including YouTubers and Twitch streamers. While this may sound niche, both of these platforms have received relentless growth, with over 300 million new members in 2021 alone.
That concludes this article on the industries that will likely be disrupted by blockchain technology in the future. As most people may expect, this list is only a small look at the potential held by the blockchain. Some industries have already adapted to this innovative technology, while others may take some additional time to follow.