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| Blockchain Technology |
Internet founding father and co-founder of TCP/IP protocol Dr Robert Kahn says systems like Blockchain make it easier for people to build applications and services based on the information itself, rather than just transporting data.
Companies and Governments are using Blockchain to transform Capital raising, Payments, Supply Chain and Digital Identification.
Capital Raising
Capital raising is an area that is being transformed by Blockchain.
There were about 752 Initial Coin Offerings (ICOs) last year, with the total market capitalization of cryptocurrencies now worth over $160 billion worldwide.
In an ICO, companies create and sell their own cryptocurrencies to users using Blockchain technology, bypassing traditional capital-raising methods like stocks and bonds.
Being completely unregulated, ICOs have aroused the interest of national financial regulators.
Given the amounts of money and public interest involved, it's unlikely the status quo will prevail.
China has currently banned ICOs, but many analysts predict it will issue a suite of regulations by the end of May.
Founder of the Blockchain platform for distributed apps NEO Da Hongfei certainly believes ICOs are here to stay.
In every technology that is so disruptive there will definitely be bubbles.
he told CNBC last month.
"Blockchain is about transparency. All the codes are open-sourced. So everybody in the world can use the codes, can read Blockchain. So definitely it will be a global trend to use Blockchain and we are moving out of China to the global market."
Da Hongfei will share his thoughts further at the upcoming APAC Blockchain conference in Melbourne, where he will explore how a public blockchain can be legal/compliance-compatible.
Mostly small start-ups and venture capitalists have used ICOs, but it is far from glorified crowdfunding with bigger firms and governments now involved.
Burger King launched the WhopperCoin in Russia last year, while the Estonian government wants to issue a cryptocurrency to fund investment.
PAYMENTS
Blockchain technology can speed up processing, lower risk, and costs, and increase transparency in payments.
Removing the need for traditional third-party verification will slash payment settlement times.
Even SWIFT, which operates the global network financial institutions use to communicate with each other, released a report in October on the feasibility of using its own distributed ledger to settle Nostro accounts in real-time.
Mastercard already allows commercial clients to send fiat currency over its new private Blockchain.
Having a complete and detailed record of every sequence in every transaction will help increase security for payments.
Although hackers could theoretically still gain access to a user account, such activity is more likely to be noticed and far easier to trace.
Blockchain offers faster processing times and enhanced security at a much lower cost.
It's no surprise that European lenders Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe General, and Unicredit will soon launch a Blockchain-based platform to improve the speed, cost, and ease of cross-border trade payments for small and medium enterprises.
SUPPLY CHAIN
Blockchain will improve accuracy, security, speed and overall transparency in the supply chain sector as well.
All parts of the supply chain could instantly know what is occurring up and downstream allowing them to react to disruptions sooner.
That ability could potentially neuter issues like overproduction or recalls, with accurate statistics on end-product sales and even customer feedback instantly filtering back to the production stage.
In the automotive industry, Toyota has been experimenting with using Blockchain to share data along the supply chain to help speed up the development of autonomous vehicles.
Distributed ledger technology will also make it far easier to track deliveries and confirm transactions.
Just last month Danish shipping giant Maersk and IBM announced plans to use Blockchain to track the estimated $4 trillion in goods shipped worldwide each year globally.
Vincent Clerc, chief commercial officer at Maersk said.
The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit.
DIGITAL IDENTITY
The blockchain is being used to create more secure and versatile digital identities.
Many governments are yet to realize the potential of Blockchain-based digital IDs for citizens.
Essentially, they are encrypted tokens containing all a person's data including passport, driver's license, tax returns, medical insurance, criminal history, credit history, etc.
Digital IDs will remove the need for riskier passwords or two-step style verification's
Canadian start-up Secure key, IBM and a number of banks will launch a Blockchain-based digital ID for the country's citizens in the first half of this year.
"This is transformational for identity. It makes it easier for me to prove it's me and harder for 'bad guy' to masquerade as me," SecureKey chief executive Greg Wolfond told Bloomberg in November.
A digital ID has potentially vast benefits for the public sector like reducing tax and welfare fraud, lowering election costs and collecting statistics on the wider population.
Meanwhile, in the private sector Blockchain is being used to customer identification easier.
Just last week IHS Markit and Cambridge Blockchain announced a project to improve Know Your Customer (KYC) technologies, allowing IHS Markit clients to quickly and easily identify customers without putting them at risk of breaching national data privacy laws.
"For firms to operate efficiently on a global scale, identity data needs to be highly portable," managing director and head of KYC at IHS Guy Harrison said.
Dr Kahn will be giving a keynote address at the upcoming APAC Blockchain conference in Melbourne, Australia. 13-15 March 2018 Which will highlight the impacts and benefits of Blockchain technologies for industries.
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