Some say blockchain is the most significant technological breakthrough since the invention of the internet; others say it’s over-hyped. One thing is for sure; it’s probably the most emotive subject in the tech world today, with the most diverse opinions.
For those not familiar with blockchain technology here’s a quick description:
It surfaced in 2009, developed by an unidentified person or group known as Satoshi Nakamoto and was the technology underpinning the creation of bitcoin digital currency.
One of the best descriptions of what it actually does belongs to Marco Iansiti writing in the Harvard Business Review:
“The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
In simple terms, because blockchain removes the need for trusted third parties or middlemen, such as banks, to administrate processes, it lowers operating costs and removes systemic risk and the risk of financial fraud.
While the financial sector is where the disruptive technology first appeared and where much of the nascent development is happening, its massive potential to be applied to other sectors is what is generating the column inches.
Blockchain could be applied, for example to the creative industries to provide artists transparency of royalty payments for rights owners. In fact, IBM has already developed blockchain partnerships in this area. Kodak has also recently announced plans to launch a similar digital token system for photographs.
In the art world, the potential of blockchain to attribute digital work, prove ownership, provenance and remuneration is the inspiration behind the launch later this year of Maecenas’s ‘The Decentralised Art Gallery’ – where individuals can buy a share in fine art, effectively ‘democratising’ access to a market previously out of reach to most.
It’s also being researched by governments for use alongside national currencies and land registration and some even talk of a future where there is one world currency underpinned by it. The opportunity it presents was validated by the amount of discussion it generated at the World Economic Forum in Davos last month.
As with any potentially game changing new technology, there are a lot of hurdles to overcome before it becomes mainstream, not least of which is the slow pace of market adoption. Significant hurdles include:
Whilst there are a lot of innovative companies developing platforms and strategies for blockchain, the roll out of a practical technology to new sectors is still a long way off. Marco Iansiti says that while the impact could be enormous; “It will take decades for blockchain to seep into our economic and social infrastructure.” The journey has already started.
This article was originally published here.