As virtual currencies skyrocket in value and credibility, more and more people are beginning to take a serious look at blockchain technology to disrupt various industries. Banks are already adopting the technology at a breakneck pace: a 2016 report by IBM predicts that by 2020, 66% of banks worldwide expect to be using blockchain at scale in their commercial operations.
But what is blockchain technology, exactly? The concept of a financial ledger goes back to the dawn of civilization, with transactions recorded in base 60 on cuneiform tablets. Clearly, the technology has come a little way since then, and blockchain is just the next step in that evolution. According to Don and Alex Tapscott, authors of Blockchain Revolution, “the blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Unlike a centralized ledger, the blockchain is hosted on a P2P network of computers (known as nodes), which is always open for read/write access.
Have you ever shared documents for editing? A traditional electronic document (think MS Word) must be transferred to an editor, where changes are made locally, after which the document is sent back. Google Docs revolutionized this process, making it possible for teams to edit documents in the cloud in real-time, keeping a record of all changes. This is how the blockchain works, whereas centralized banks are stuck with the “MS Word” paradigm.
This is why it takes so long to transfer money: the ledgers on both sides must be updated individually while the transfer is performed. Blockchain makes the whole process much faster, easier, and more secure, because it’s conceivable that financial records can be hacked and altered at an individual bank, but when records are hosted in the cloud, the other 99%+ of nodes will still have the authentic blockchain record.
So what does all this mean for the future of blockchain adoption? The technology sector was the first logical step, and the gaming industry is already seeing the benefits of blockchain technology, making it easier for gamers to purchase in-game items, and giving them more incentives to trade using virtual currency. This also eliminates middlemen such as Steam, Apple, and Google from siphoning substantial revenue (up to 30 percent) from game developers, and making them wait up to 60 days to receive payment for their work.
Another industry that’s being disrupted by the blockchain concept is real estate, where the same advantages will serve to ameliorate the often risky and cumbersome process of buying property. In this case, the middleman is the escrow or title company, which usually takes 1-2% of the total value of the property — not an insignificant figure — to ensure both parties’ honesty and legitimacy.
The distributed nature of a blockchain ensures credibility.
Again, the distributed nature of a blockchain automatically ensures this credibility, which also prevents fraudsters from posing as sellers and bilking potential buyers out of their money. Another great advantage is transparency: in a blockchain, buyers’ credit history and income will be readily available, and homeowners can prove ownership of the property and provide a complete record of repairs and upgrades.
The possibilities don’t end there: even sports can see a new era of revitalization, as up-and-coming talent finds new ways to get funds for their training, and coaches, talent scouts, and fans get an opportunity to be a part of the process. A new ICO called TokenStars has bold plans to disrupt the 40-billion-dollar talent management industry, and will apply the blockchain concept to tennis, offering ACE tokens as part of the funds collection to tokenize tennis stars’ careers.
Elena Masolova, TokenStars investor backer and Forbes top-30 internet entrepreneur, explains, “Aspiring tennis players need approximately $100K a year to build a career. Some have to put everything at stake, just like Olympic medalist and 5x Grand Slam winner Maria Sharapova, who came uninvited from Russia to Nick Bollettieri Academy in Florida at the age of 9. Her father had to work as a dishwasher just to cover her bills. Later she earned $36.5M in prize money and $285M in sponsorship deals. With ACE, young players like Maria Sharapova can get funding help covering their academy costs, coaches, sparring partners, and tournament participation, as well as support in signing sponsorship agreements.”
The list goes on, but we believe that as blockchain technology continues to penetrate all spheres of life, everyone stands to benefit: banks, realtors, gamers, athletes, sports fans, and just about anyone else you can imagine. This is a trend that’s definitely worth watching.