Blockchain technology is a phrase many of us have heard. Some of us understand it, some use it, while others remain wholly unconvinced it is the next big thing. So what exactly is blockchain, and is it something that is here to stay?
What is blockchain?
Blockchain is a digital method of recording data in a way that is impossible to hack, amend, delete, or cheat. It is a digital ledger storing transactions chronologically, distributing them across an infinite number of computer systems on a network. Think of it like a Google Docs file that any user with permission can access. Once granted permission, they can access the document and make changes. Anyone accessing the document from another device sees it updated in real-time. While Google Doc content can be changed, an immutable record of all edits is visible. This is similar in lots of ways to how the blockchain works.
Blockchain enables the existence and creation of cryptocurrencies. It records and logs every single cryptocurrency transaction, including a timestamp. It is entirely decentralised, meaning users approve transactions that cannot be changed later.
How did blockchain technology start?
Contrary to popular belief, blockchain is not a new technology, and it has actually been around for several years. In 1982, cryptographer David Chaum proposed a protocol similar to blockchain in a dissertation entitled “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups”. Researchers and software specialists developed this concept over the years. The result was a system where chains of blocks could be added to but not altered.
Then in 2008, Satoshi Nakamoto developed the first decentralised blockchain as we know it today. It was designed to power bitcoin, a digital currency they had also created. Today, it is still used to power cryptocurrency transactions but also used for a variety of other uses as well. According to PR Newswire, the blockchain sector was worth $3 billion in 2020 and will reach $40 billion by 2025. Additionally, spending by companies on blockchain technology will reach almost $18 billion by 2024.
What has it become?
Aside from underpinning cryptocurrency, blockchain can be used for various purposes. While crypto is still the number one purpose, data sharing and data reconciliation are also popular. In addition, identity protection, payments, tracking, and tracing are all ways the technology is being utilised, according to Deloitte.
More and more businesses are set to leverage the potential of blockchain technology, both with crypto and without. Grandview Research suggests that 300 million people own or use cryptocurrency and interact with blockchain technology. Analysts also think that the blockchain market could be more significant than most realise, predicting growth of nearly 90% by 2030.
PwC has then estimated that blockchain could even boost the world’s GDP by a staggering $1.76 trillion by the end of the decade. This is due to its ability to streamline operations, save money and time, and reduce issues like fraud. It notes that some 61% of companies prioritise digital transformation as they recognise it will help them grow. In addition, they believe blockchain technology can meet demands for better security and higher levels of transparency.
Currently, the financial sector accounts for 30% of blockchain use, manufacturing 17.6%, distribution and services 14.6%, and the public sector 2.4%. Furthermore, the use of blockchain in healthcare is set to peak at over $1.18 billion by 2028, making it a key vertical for growth.
Is blockchain technology here to stay?
The short answer is yes. According to Deloitte, the long answer is that almost all financial stakeholders believe blockchain has achieved mainstream adoption. They think it is broadly scalable and has a compelling use case for it in their businesses. In addition, more and more are coming around to the notion of digital currencies and digital assets. Last but not least, 93% believe it will bring in more money, with failing to adopt it costing them.
So, yes, blockchain is most certainly here to stay.
We cannot build you a blockchain or help you create your own digital currency. But we can help you set up a blockchain or crypto company. Our team are specialists in corporate matters such as incorporation, structuring, payments, and compliance. We can also assist you with licensing if you intend on working in a regulated sector. Additionally, we are on hand to help you with all ongoing maintenance, so you can focus on your business.