Blockchain technology can change the world, and not just through crypto

Over the past three or four years, blockchain adoption has grown significantly and each industry is exploring different use cases for the...

Over the past three or four years, blockchain adoption has grown significantly and each industry is exploring different use cases for the technology. There are several aspects of blockchain – from business to tech and more – but with the way the industry is exploding, it’s really hard to get it right.

It is best to divide the subject of blockchain into two main groups in order to understand the development of the ecosystem and the main benefits and innovations that it offers. One is cryptocurrency, where we cover sectors such as financial services, insurance, and capital markets, including transactions through private equity and venture capital. Next, we take a look at the corporate world, which is about how we apply blockchain as a technology in different industries.

Corporate blockchain

Last year, we released our ‘Time to Trust’ report, which covers The top five use cases for blockchain technology: origin, payments and financial instruments, identity, contracts and dispute resolution, and customer engagement. These use cases will have a significant impact on a country’s GDP and the global economy.

Use case number one is traceability or provenance. Going forward, with the decentralized technological revolution and evolution, you will need to understand and provide full transparency to your consumers. For example, if you buy cancer drugs, which are very expensive, you should know that they are genuine and not fake. And this is where we have a technological solution that is enabled by blockchain technology. It is the same with the purchase high fashion clothes, cars, etc. expensive. Consumers who pay big bucks need to be sure they’re buying genuine items, which is why these supply chains could be a deadly use case for blockchain, especially over the next decade.

The second use case is around peer-to-peer commerce. But how does P2P commerce make sense within the supply chain? It’s around the logistics market. Imagine, for example, that a company wants to ship a container from Amsterdam to Australia. He has to go to a transport company, which will move a container onto a ship, and then he actually goes ahead. There are also transportation providers on the other side of the trade, and they are doing the same. They unload the container and make sure it gets shipped to the importer. But what if you had a market or platform where you could see how many ships are traveling the next day or hour? And if there is space available, you can directly place the container you want to ship yourself, which means you don’t need a middleman. This is what the future looks like with this kind of decentralized technology.

And then the third – and the last bucket – is around document sharing. How do you digitally store all your bills of lading, letters of credit and certificates? Right now, you can do it with a cloud solution, but it’s easy to hack a PDF. And there have been instances where transportation companies have faced millions and billions of dollars in fraud, forcing them to stick to paper documents because then they know the paper is accurate proof and that they have something tangible in their hands. But with the blockchain, you can add a timestamp and completely track how a document is generated, where it came from, who opened it, who modified it, and who modified it.

Related: Let’s go back to the original purpose of the blockchain: the timestamp

You can follow this completely, and it is also time consuming. There have already been many business cases. For example, if you put only one bill of lading, only one document is recorded on the blockchain. And it also saves a hundred dollars per container. So you can multiply that by the number of containers shipped per day, and it’s already a business case worth billions. There is huge potential in this use case. So, we see these three buckets in the supply chain.

A mixed feeling on the blockchain

But now the question is: what is the status quo right now? There is a mixed feeling about this, firstly because blockchain technology itself is super complex – it’s not like the Internet of Things. With IoT, it’s, “Okay, this is my device, and now it’s a digital version of it. This is what IoT does.

But what does the blockchain do? It’s the technology behind the curtain. That’s why people have a hard time understanding it – understanding that it’s something like Internet Protocol. You don’t really go into the details of what HTTP does and how it works, you just take your website and do whatever you want to do. This is what we are talking about. This is really the subject.

The second thing is the lack of knowledge and understanding of blockchain, which consists of five different aspects: immutability, encryption, distribution, tokenization, and decentralization.

Related: Understanding the systemic shift from digitalization to tokenization of financial services

These are the five aspects, and the immutability, encryption and distribution provided by blockchain technology has been well established. What businesses need now is to take a big leap towards decentralization and tokenization. It is essential that companies understand the tokenization model and how they can integrate it into their current business model. Additionally, businesses need to really understand the use of tokens – fungible, non-fungible, and security tokens.

The only recommendation for companies is to have a more in-depth and in-depth education on this topic, to go into the details of how it relates to their business and the type of problems it solves – rather than simply explore the technology on a surface.

What’s coming in the future, and what’s coming next year?

The first and most important topic concerns interoperability. The landscape over the past five years has exploded – literally exploded. If you look at how the internet developed, we had VPNs in the 90s and then the bubble boom and how the internet got popular. Today, some businesses still use VPNs, while others use the internet, and you don’t really see the difference. And that’s how we see private and public blockchains working together. So there is no debate: public blockchains will prevail, and private blockchains will prevail. And this topic of interoperability is really in the market, but a tremendous amount of work needs to be done. This is what companies and solutions will deliver over the next five years.

The second topic concerns how we to integrate with other technologies, because blockchain is just a back-end technology – or some kind of behind-the-curtain technology. That’s why it’s super important. At the same time, it’s super strategic because it involves several companies, but it’s still a technology that is a backbone. And just because you have the blockchain doesn’t mean it solves everything in your business. So I think companies need to understand how to integrate it as a form of digital transformation. What we need to do is examine how these technologies will fit into the existing landscape. It is a major, major subject. Without it, nothing will work. This is indeed a subject that we must address.

The third futuristic subject is one of my favorite subjects. It’s around governance: blockchain governance, but also supply chain governance. This answers the question of how we manage the supply chain actors involved in the ecosystem. This also goes hand in hand and it is something that we must also develop.

And the fourth topic is all around the business model because in the end, companies forget that it is necessary to make money from it and also to save money. Sometimes blockchain solutions don’t fly because they can’t. For example, how can we activate paperless business models? And how do you get income from it? If we make income, how do we share it with our various partners?

I think these are the major topics that will be key in the development of the blockchain ecosystem over the next five years and help blockchain to reach the next level. This technology will reach the level of mass adoption step by step, and its integration is a smart strategy that will allow companies to be at the forefront of the digital economy and the future of the business world.

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Husen Kapasi is the Blockchain Manager at PwC Europe (consultancy), with a focus on enterprise blockchain. He leads the PwC Europe blockchain community, which consists of approximately 300 members across Europe, and leads blockchain topics in the supply chain across the global PwC network. He has been engaged in the blockchain space for five years, with previous experience in IoT-driven digital transformation consulting. He has extensive experience in the implementation of blockchain in more than 10 industries. He supports clients from the blockchain strategy to implementation and plays a key role in the development of collaborative industrial ecosystems as well as technological partnerships.