The ability to convey a shared truth that everyone agrees on without the need for intermediaries, or centralized authority, is a major selling point of this remarkable new technology:
- Definition – According to IBM, blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.
- Market dimensions – AngelList has 5,582 companies in its Blockchains Startups list, a figure that is growing by two companies a day or 200% in just three years. This is by and large the fastest any area of technology has taken off in terms of new company formation.
- Opportunity – Global banking is a $134 trillion industry built on old-school, three-day bank transfers. Even at its slowest, a bitcoin transfer takes just 16 hours, and, quite often, much less time.
- Smart contract – Another significant advantage of blockchain is the “smart contract,” which uses a distributed ledger that automates many of today’s tedious business processes, including compliance, claims processing, title searches, and delivery verification. One possible application is to provide both manufacturers and e-merchants with a permission-based, private blockchain. Smart contracts would then allow contracted parties to write new entries into a system of record, addressing some of the biggest pain points in e-commerce — promised delivery date compliance, defective claims processing, and delivery verification.
- Venture capital – VentureScanner reports that funding of blockchain technology companies actually dropped for a second consecutive year in 2020 to $1.5 billion.
While venture activity in blockchain technology companies has declined, the uptick in interest in blockchain-based NFTs (Non-Fungible Tokens), which promise to revolutionize the digital art market, plus the crypto boom, will certainly result in a renewed interest in blockchain technology.