Why & How Blockchain Is The Future
Why Blockchain Is The Future
Since the major price gain in Bitcoin and other virtual currencies, many people have taken an interest in the blockchain. However, if you do not fully understand what it is, you are not alone. Most financial experts, especially those in the accounting department are quite excited about this technology.
Essentially, it is a permanent and immutable record, which has numerous implications for the world of finance and beyond. Here is more about the future and the blockchain that we at Bit Gale have created for you.
The Sharing Economy and Blockchain
The sharing economy first burst onto the scene after the economic burst of 2008. There was a lot of initial investor enthusiasm about this economy. Many startups such as Uber and Airbnb fully took advantage of the situation and succeeded. However, many others flopped.
Many economists have already dismissed the idea of the sharing economy. In the past few years, there has been a general sense of fatigue regarding this economy. However, now some feel that the blockchain combined with the sharing economy could turn things around. This will allow individuals to share wealth beyond certain companies and people.
One of the key developments that could aid the sharing economy is the development of smart contracts. The blockchain is going to make it cheaper to create and run an online platform. For instance, a transaction could be executed by a self-executing smart contract at a low cost. The sharing economy can help to ease the inequalities of today.
The advertising industry is today worth billions of dollars. It is estimated that by 2021, digital marketing spending will have hit $120 billion. This is part of the reason why major tech giants are working so hard to collect as much consumer data as they can.
However, it is worth noting that nearly half of all ad traffic comes from bots. Brands pay huge amounts of cash to reach their customers. However, there is usually no guarantee that those ads will lead to a rise in sales. However, this could all change if businesses can target customers directly.
One of the most promising technologies for this is the blockchain and smart contracts. With the blockchain, businesses could pay customers via a smart contract for viewing ads. Not only will customer be incentivized to view ads, but they will also be assured of security. The blockchain will allow users to have complete control of all their data.
With the blockchain, users will be able to choose the amount of data that they want advertisers to view. Later on, users can get compensation for that data using a digital token. Thus, instead of relying on an intermediary to sell ads for you, it will be possible to sell the ads yourself.
With a smart contract, you will also be able to reach out directly to influencers. There will be no third party regulating your interaction with these influencers. Since they are automatically enforced, you will not need a third party escrow system, which can be quite costly. For instance, if an influencer never publishes your article, then you do not have to worry about them getting their money anyway.
Verifying Banking Transactions
One of the biggest overhead costs today in the financial world is maintaining a verification system. This system usually requires numerous upgrades to keep it safe from hackers. Besides that, it usually costs a lot just to purchase. Afterward, you have to pay many tech experts along the chain to keep it secure. However, all it takes is one person acting in bad faith to disrupt the whole system.
There is also the issue of time, creating these records usually takes up a lot of time. Additionally, it uses up a lot of storage space, which also has to be stored securely. However, despite the best of efforts, errors do occur occasionally. In terms of time, someone may, for example, sell a stock immediately but the settlement of the transaction ends up taking days.
This is also the case for car sales. You can buy a car today, but the settlement of all details can take days. All of this is valuable time that cannot be retrieved. You will also have to involve lawyers in large transactions, which comes at a huge cost. There is also the fact that each party has its own records, which are not accessible to the other.
With the blockchain, transactions are immediate and permanent. They can also not be disputed since they are available for everyone to see. The verification of all the details such as price, terms, and the ownership all takes place within seconds. The change is also registered on all other existing records for eternity. This helps to eliminate the need for third parties, which can cut down transaction costs and time significantly.
With the freed up time, this could cut down time wastage and help boost the global economy by hundreds of billions of dollars.
These are just some of the ways in which the blockchain will leave a permanent mark on the global economy. Already, there are many projects launched by companies such as IBM to exploit this potential.