What is Blockchain, and will it really change the world?
The cycle of hype.
People get a little hysterical when supposedly ‘disruptive’ technology is made. These same people also tend to be crestfallen when this technology doesn’t change the world overnight. The research firm Gartner has labelled this phenomenon of human behaviour the ‘hype circle’. One example of hyped technology are blockchains. But what are they, and have they already peaked? Or are blockchains silently conquering the world without most people even knowing what they are?
The mother of all blocks.
You don’t need to understand how blockchains work to appreciate why they are useful. Instead, it may be better to comprehend what they can do. A blockchain is often compared to a cash book for a current account. The cash book was invented in 16th century Italy - the ‘Silicon Valley of the Renaissance’. Its purpose was to enable access to money across two geographically different places. Instead of having to physically transport coins from A to B, you could now transfer money into promissory notes, or vice versa. The Renaissance movement aimed to lift society out of the dusty Middle Ages and understand the world using science and reason. Without the concept of bank accounts, the discovery of the new world would not have been possible. Nor would trade via the silk roads. There would have been no financial communication across continents and different cultural systems.
Blockchains are essentially a digital register of money and data transfers. They organise the exchange of data and currency in a decentralised system. Blockchains are designed to accelerate transfer speed, so that digital services can be performed instantly while remaining 100% secure.
Is there blockchain in that?
The cryptocurrency Bitcoin proved that blockchains can be successfully implemented. When it was introduced in 2009, a Bitcoin was valued at around 1 USD. Today, it trades at roughly 8.325 USD. The remarkable thing about Bitcoin isn’t just this steep climb in value, but rather the confidence of users in its reliability and security. Can blockchains be used in other digital sectors? The car e-Wallet platform by ZF is based on blockchain. It serves as a digital car key and also provides financial services like automatic payment for parking or gas. Indeed, services like chark.me or ‘smart ready to’ would not be possible without blockchain.
Blockchain’s growing popularity is reflected in market statistics. In 2016, the global blockchain market was valued at 216 million USD. 40% of this revenue is generated in North America. The global market value is set to reach 9.6 billion USD by 2024, and increase tenfold by 2027, with revenue of 45 billion USD.
One of the main players in this market is IBM, with a 10% market share. This technology attracts computer giants like Intel and Microsoft as well as relatively unknown firms like Chain Inc., Accenture Plc., Eris Industries, Blockchain Tech Ltd., Digital Asset Holdings and Earthport.
Perhaps the most exciting part is how blockchain will serve those who no longer want to own a car. These people understand mobility is a service, and that access to this is the basis for more services. They want to drive certain cars depending on their mood and needs. The shared car will become a platform. Despite not owning the car, the user will be able to instantly retrieve his personal presets for music, seat settings or navigation preferences. And the magic behind this will be blockchains - guaranteeing instant response and safety of personal data. A car will no longer be defined by its performance or cylinder count, but the computing power it wields from blockchains.
People should be allowed to gush over new technology, even if they don’t fully understand how it works. Let’s be honest, most airline passengers don’t understand what makes a plane fly either, nor could most smartphone users explain the physics behind telecommunication. What is important however, is to recognise what a certain technology can help us achieve.