What is the first thing that comes to your mind when you hear the word blockchain? For many people, it is usually bitcoin. Though cryptocurrency is the most well-known use case, blockchain technology has gone beyond that to infiltrate virtually every industry and transform global economies.
Blockchain is indeed a disruptive technology that has a unique data structure with a linear, chronological set of records of information, which is immutable. As a distributed ledger, this technology can enhance security and enabled structured collection of data, without duplication or distortions from outside.
While blockchain is certainly not a panacea for all business transaction problems, it has seen an uptick in all major verticals including financial services, energy, and manufacturing. As we have seen in the Middle East, blockchain technology is also being adopted in the public sector to improve transparency and build better public services.
Industry experts forecast that the blockchain market will grow at a rapid pace in the coming years. The financial sector will lead this growth curve, driven mainly by rapid adoption in the banking industry. This stems from the fact that blockchain technology has some truly disruptive implications for the financial industry as it offers a decentralized ledger of all transactions, is tamper proof and virtually instantaneous. It also has the advantage of expediting payment processing and money transfers between parties.
Another strong use case is monitoring supply chains where collaboration, traceability, and transparency are some of the most important considerations. In the real world, this means adding greater visibility and efficiency by removing paper-based trails and knowing in real-time the exact source, location, and state of all inventory.
For the retail industry, blockchain offers consumer-facing possibilities to enhance the shopping experience, real-time liquidity to consumers, fraud prevention and management of loyalty points. Blockchain enables the use of cryptocurrencies — sometimes also called tokens — as of a means of exchanging value or data. Tokens can dramatically simplify the tracking and managing of loyalty points, making it more easily swappable between consumers and across retailers.
Blockchain technology has also recently been adopted by the real estate industry to transform core operations such as property transactions including purchase, sale, financing, leasing, in addition to land and title transfers.
It enables all the parties involved to have a transparent view of all the data from a property transfer, significantly reducing costs and time in payment processing.
Businesses of all sizes are taking an active interest in this disruptive technology as it offers immediate benefits and recently, tech giants have started to offer blockchain-as-a-service to ease the deployment process for first-time adopters looking to test the waters without upfront investments.
The Middle East is exceptionally receptive to this new technology and investments are constantly increasing as regional organisations continue to launch proof-of-concepts and pilot projects. I believe 2019 is going to be a tipping point as we are going to see blockchain break out of the oven with some real-world solutions, enabling new applications across various industries.
Though blockchain is surely gaining traction, for enterprises implementing the technology comes with its own set of challenges, especially around integration issues with legacy enterprise software systems. Another stumbling block for CIOs is regulatory concerns and lack of industry standards and interoperability between various blockchain networks. It is important to remember that blockchain is a technology that continues to evolve and grow, and these kinks will be ironed by out by the industry as we move forward.
Undoubtedly, blockchain has the potential to eliminate existing inefficiencies in key business processes, and it is worth investing time and resources in this exciting new technology to explore new opportunities that could help fundamentally change your organisation.