Over the past three or four years, blockchain adoption has expanded tremendously, with each industry exploring different use cases for the technology. There are multiple aspects of blockchain – from business to technical and more – but given the way the industry is exploding, it’s really difficult to get it right.
It is best to break the blockchain topic down into two main areas to understand how the ecosystem is evolving and the key benefits and innovations it offers. One of them is cryptocurrency, where we cover industries such as financial services, insurance and capital markets, including transactions through private equity and venture capital. Then we look into the corporate world, which is about how we use blockchain as a technology in various industries.
Last year we released our “Time for Trust” report, which covers the five key use cases of blockchain technology: origins, payments and financial instruments, identity, contracts and dispute resolution, and customer loyalty. These use cases will have a significant impact on a country’s GDP and the global economy.
The number one use case is Traceability or origin. In the future, with the decentralized technological revolution and evolution, you need to understand your consumers and provide them with full transparency. For example, if you are buying cancer drugs that are very expensive, you need to know that they are authentic and not fake. And here we have a technological solution made possible by blockchain technology. The same goes for buying expensive haute couture clothes, cars, etc. Consumers paying a lot of money need to be sure that they are buying authentic items, which is why these supply chains could be a killer use case for blockchain – especially the next Decade.
The second use case is approximate Peer-to-Peer Trading. But how does P2P trading make sense within the supply chain? It is about the logistics market. Suppose a company wants to send a container from Amsterdam to Australia. It has to go to a transport company to put a container on a ship, and then it actually goes on. On the other side of the trade, there are transport providers and they do too. You unload the container and ensure that it is delivered to the importer. But what if you had a marketplace or platform where you could see how many ships were going in the next day or hour? And if there is space available, you can place the container you want to ship directly yourself, so that you do not need a middleman. This is what the future looks like with this decentralized technology.
And then the third – and the last bucket – is there Document approval. How can you digitally store all of your bills of lading, letters of credit and certificates? For now, you can do this with a cloud solution, but it’s easy to hack a PDF. And there have been cases where transport companies have faced billions and billions of dollars in fraud and have forced them to stick with paper documents because they know that the paper is exact evidence and that they have something tangible on their hands. But with blockchain you can add a timestamp and fully track how a document is created, where it came from, who opened it, who edited it, and who changed it.
Related: Back to the originally intended purpose of the blockchain: time stamping
You can keep track of that, and that’s a lot of time. There have already been many business cases. For example, if you only store one waybill, only one document is stored 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 that’s already a business case worth billions. There is enormous potential in this use case. So we see these three buckets in the supply chain.
A mixed feeling about blockchain
But now the question arises: what is the status quo at the moment? There are mixed feelings about this topic, partly because blockchain technology itself is very complex – it’s not like the Internet of Things. The IoT says, “Okay, this is my device, and this is now a digital version of it. That’s what IoT does. “
But what does blockchain do? That’s the technology behind the curtain. Because of this, people find it difficult to understand – to understand that it is something like the Internet Protocol. You don’t really go into detail about what HTTP does and how it works, you just take your website and then do what you want. We talk about that. That is really the issue.
The second thing is the lack of awareness and understanding of the blockchain, which consists of five different aspects: immutability, encryption, distribution, tokenization, and decentralization.
Related: Understand the systemic change from digitization to tokenization of financial services
Those are the five aspects, and the immutability, encryption and distribution that blockchain technology offers are well established. What companies need now is a big leap towards decentralization and tokenization. It is important for companies to understand the tokenization model and how to integrate it into their current business model. In addition, businesses need to really understand the use of tokens – fungible, non-fungible, and security tokens.
The only recommendation for companies is to educate themselves more and more deeply on the subject, dig deeper into how it relates to their business and what problems it solves – rather than just exploring the technology on the surface.
What is in the future and what is in the next year?
The first, most important topic revolves around Interoperability. The landscape has exploded in the past five years – literally exploded. If you look at the evolution of the internet, we had VPNs in the 90s and then the bubble boom and the way the internet got popular. Today some companies are still using VPNs while others are using the internet and you don’t really see the difference. And so we see private and public blockchains working together. So there is no debate: public blockchains will prevail and private blockchains will prevail. And this interoperability issue is really on the market, but there is still a lot of work to be done. This is what companies and solutions will come up with over the next five years.
The second topic is how we do it integrate with other technologies, as blockchain is just a back-end technology – or a technology behind the curtain. That’s why it’s super important. At the same time, it’s super strategic because there are multiple companies involved, but it’s still a technology that’s a backbone. And not just because you have blockchain, it solves everything in your company. So I think companies need to understand how to integrate them as a form of digital transformation. What we need to do is examine how these technologies can be integrated into the existing landscape. That’s a big, big topic. Without it, nothing will work. It is indeed an issue that we need to address.
The third futuristic theme is one of my favorite subjects. It’s round guide: Blockchain governance, but also supply chain governance. The question is how we manage the supply chain stakeholders involved in the ecosystem. That also goes hand in hand and is something that we also have to develop further.
And the fourth topic is about them Business model because ultimately companies forget that we have to earn money with it and also save money. Sometimes blockchain solutions don’t fly because they can’t. How do we enable paperless business models? And how do we make income from it? When we generate income, how do we share it with our various partners?
I think these are the big issues that will be critical to the development of the blockchain ecosystem over the next five years and will help blockchain reach the next level. This technology will gradually reach mass adoption levels, and its inclusion is a smart strategy that enables companies to lead the way in the digital economy and the future of business.
The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
Husen Kapasi is Blockchain Lead at PwC Europe (advisory), with a focus on Enterprise Blockchain. He leads PwC Europe’s blockchain community, which consists of around 300 members across Europe, and drives blockchain issues in the supply chain in the PwC Global Network. He has been working in the blockchain sector for five years and previously had experience in consulting on digital transformation with a focus on IoT. He has extensive experience in blockchain implementation in more than 10 industries. He supports clients from blockchain strategy to implementation and plays a key role in the development of collaborative industrial ecosystems and technology partnerships.