How Blockchain Will Change The Way We Do Business
Let’s face it: Blockchain technology is going to be a game changer. Far from being just a way to make cryptocurrency circulate, this revolutionary way of thinking and managing data is going to change so much, and for the better, the way we do business, not only on the ethical side. Of course transparency, traceability and total impossibility to overwrite data, three core features of Blockchain, will leave little or no room to corruption and shady transactions, but the advantages in practical terms are at least as tangible, if not even more.
One aspect of Blockchain we can define as revolutionary, is the radical reduction of human interaction, with relative costs, in all the intermediate operations necessary in most of the transactions, operations that take their toll in terms of money and, let’s face it, in terms of accuracy: the more people put their hands on data, the higher is the possibility of mistakes and data corruption. With Blockchain, and with Smart Contracts in particular, this process is going to become way simpler, way quicker and way better.
- Think of a rainy Sunday, you decide to go to the cinema with your family. You will buy movie tickets for you and your relatives. Do you know what lies beyond these little pieces of paper? A series of contracts stipulating that a certain percentage of the ticket price goes to the theater, a certain percentage goes to the distributor that made the film available and a certain goes to the studio that produced the movie, and consider that the number of passages is here reduced in order to make it simple! Well, what does this mean in very practical terms? Cashiers physically counting money, administrative employees doing bank wires and other resources verifying everything is done correctly. Now, if you try to figure out how many movie theatres a movie is shown in, well, this means the whole process is repeated a huge amount of times every day, and this is just the first passage! How much does it cost? How much money is lost just due to human error?
Once you even try to figure it out, you’ll understand the extent of the savings offered by a Smart Contract that, upon the payment of every ticket, automatically breaks down the price paid in the exact percentages and places the exact amount of money in the corresponding virtual Wallets. You can hardly think of a simpler and more accurate process than this radical optimization of the way money are moved, money saved in huge amounts.
Smart Contracts are becoming, day by day, a solid reality in the insurance sector: the possibility to automatically activate functions and clauses dramatically reduces the needs of long and expensive verifications. Also, a Distributed Ledger means more accurate reports, better governance a consequent wiser management of the risk.
Food and Beverage is another interesting application of Blockchain, in an industry where traceability information is crucial for quality and sanitary reasons, and altered information can definitely be a plague. Making data impossible to overwrite and the traceability of the food total and accurate is a crucial asset not only for at least two reasons. First of all, the origin of the food plays a decisive role in its quality certification and for some countries in particular this is a critical selling point, susceptible to unfair competition of companies who play tricks like raising animals in a country and moving them to a more prestigious country just before slaughtering them and processing them into food, faking it as food with a higher quality origin. With a complete traceability, this is impossible. What is possible is the other reason that makes traceability so important: food can be altered in many ways that can cause a sanitary emergency, and in this case being able to identify it is crucial to understand the problem and contain its consequences as much as possible. Long story short, Blockchain means knowing for real what we are putting on our tables, it means better and healthier food.
If all these applications sound a little distant from everyday life, think of an instrument you use so often you almost don’t notice anymore, this little plastic piece in your pocket: your credit card. We pay almost everything with our credit card, therefore a cost saving option on every single payment can be more than interesting, on the long run. Now, crypto currency is becoming more and more common but, let’s face it, it’s still susceptible of fluctuations and the value of a single crypto can significantly vary, making its usage more or less convenient depending on the very single moment. Having a Wallet with more than a token, for example Bitcoin, Ethereum and AMN, is undoubtedly a wise solution but it’s also complex: what crypto currency is better to use in a particular moment? This might no longer be a problem, thanks to newly developed crypto debit cards linked to a Wallet able to instantly calculate the more convenient currency at the moment of the payment and convert it, if needed, to fiat currency, protecting the card owner from the fluctuations typical of the crypto currencies. Needless to say, with the frequency we use credit cards every single day, it can definitely play a key role in our monthly budget.
In the end, the key points of the change created by Blockchain are two. First of all, participation. The DLT – Distributed Ledger Technology, is based on the idea that every participant of a network detains a copy of the ledger with all the transactions, becoming an actor, and no longer being just a spectator, in the business. The other point is to find in the structure of the transactions themselves, much more straightaway, that will radically redefine the role of those players, like banks and solicitors, that thrive on their being, as intermediaries, in the middle of the transactions intercepting and organising the cash flow without adding real value to the business. Of course they will not just be taken out of the picture, but they’ll have to rethink themselves in the terms of the solid value they’ll have to offer to remain in the market.