In the past, blockchain — which is known as a distributed ledger technology for both financial and non-financial transactions — seemed like a mysterious concept that only technologists could understand. However, the various advancements in blockchain applications in 2016 helped more people and more businesses see its potential.
For others in the business environment, blockchain is something they’re still just exploring. But as we get further into 2017, there are a few trends that I think will be interesting to trace as the year progresses.
In working with blockchain myself as part of the payments industry, where most applications are tied to some type of banking or financial application, I see some of these trends already in progress. However, some of them go beyond payments and may offer application for other business segments, helping startups and established businesses address a particular need.
Growth In Applications
With ongoing research and greater understanding of how the blockchain works, one of the biggest trends I predict in 2017 is the use of this technology in new application areas across industries. I see this happening especially in business segments that have always had a middleman as part of the transaction. This means that many service-oriented businesses decentralize. For example, ride sharing transactions could be handled directly by drivers and passengers using the blockchain, which could then give once-disruptive companies like Uber and Lyft a run for its’ money.
Other applications include streaming services. We could let artists decide how their music is sold and shared, and everyone — from the writer to the producer to the singer — could receive a payment immediately through the blockchain when a song is downloaded, rather than getting their share later on. Rather than waiting for royalty checks to arrive that are processed by a publishing company, the artist can take greater control over their process from publication to payment through blockchain applications.
One of the most challenging aspects of giving blockchain the space to grow into what it is capable of becoming is the lack of a regulatory environment that would help countries feel more comfortable about its use. Recently, countries like Japan have gone as far as to create legislation that would regulate bitcoin in their country, while other countries have formed task forces to research what’s involved in the use of bitcoin and blockchain. These are both major first steps toward a larger global framework.
Since everything to date has been fragmented in terms of a standardized regulatory framework to allow blockchain to work across geographical borders, blockchain has been slow to catch on. However, there are signs that greater progress will be made across multiple countries to determine some type of regulatory process that will increase use.