Blockchain is currently one of the biggest buzzwords in fintech. There are numerous financial institutions, small start-ups, and big brands investing in the blockchain revolution. Despite this, there are still questions over whether there really is a blockchain revolution taking place at all. Depending on your viewpoint, the answer will definitely vary.
The use of blockchain through the Bitcoin network
One of the main uses of blockchain technology is to underpin the Bitcoin network. Through a blockchain, you are able to send Bitcoin anywhere to anyone, with no third party able to stop you. This is the key benefit of using blockchain technology in Bitcoin – it is permissionless.
However, this also comes with drawbacks. The Bitcoin blockchain is quite slow at processing transactions. Yet this was a design feature incorporated from the beginning to protect the decentralised nature of the network. Other cryptocurrencies can deal with more transactions per second, but to do so, they reduce the decentralised nature of their own cryptocurrencies.
Other use cases of blockchain technology
Blockchains have often been compared to slow and inefficient databases. If this is so, then why are so many companies taking their time to invest money into the industry? For many Bitcoin maximalists, the answer is simple: they do not understand the technology.
Permissioned blockchains are one such issue. The point in using a blockchain is for it to be permissionless. A permissioned blockchain akin to Bitcoin would create a system similar to that of traditional centralised banks, thereby rendering it not only pointless but even slower than the traditional financial system.
Banks have been looking at the possibility of using blockchain to improve their cross-border payment systems, which still currently rely on the Swift network. JP Morgan has announced it is releasing its own version of a cryptocurrency, but details on how this will work are still slim.
Another aspect that could be harnessed by financial institutions through blockchain is reducing the risk of fraud. Currently, with data stored on a central database, there is one single point of attack for a would-be hacker. By splitting this data up onto a blockchain, hacking could theoretically become much more difficult.
The financial industry is not alone in examining the blockchain hype. A number of different sectors are looking into the potential of the technology, including gaming, energy, gambling, and porn – even the film industry has jumped on board with the new film Crypto. Were each of these industries to successfully incorporate blockchain technology into their businesses and improve the result for the consumer, then the revolution will have definitely happened.
As of yet though, there are very few tangible blockchain-based products, let alone any that have reached the mainstream. In spite of this, there are many more ideas for incorporating blockchain into daily life in industries where you didn’t even think it was imaginable.
The hype of blockchain technology is real. Whether this is good or bad is yet to be discovered.
The booming blockchain conference industry
One industry that has blossomed through blockchain though is that of the speaker circuit and conference industry. Of course, a blockchain isn’t even used here, but companies are able to gather folk to pitch their revolutionary products to like-minded people. Having attended a few of these blockchain conferences though, it is rare that any of the products are anything more than a cash grab.
And herein lies the issue in the blockchain space. By adding blockchain to your business, you instantly gather more interest than if you didn’t. As such, there are too many poorly-thought-out ideas and sometimes outright scams that make the idea of a blockchain revolution look a mile off.
Many people still believe both Bitcoin and blockchain are very much in their infancy. One could argue that there has already been a blockchain revolution through the advances and growth of cryptocurrencies. The only issue with this is no one can know whether they will have the staying power. If Bitcoin is still around in 10 years and is still being used, then that would be a revolution on its own.
There are many people who are adamant that there will be a blockchain revolution in the next five years. Yet there are also many who viewed the whole industry as an overhyped bubble. Similar issues arose with the internet. It is too early to say that there is a blockchain revolution on a grand scale though as there are very few working products incorporating blockchain.
So far, a select few cryptocurrencies have achieved success. If or when blockchain becomes a daily part of life, then we can look back and say that we lived through the blockchain revolution.