Companies are racing to learn more about blockchain and how they can apply it to their business. Here's where this technology is headed.
Blockchain is undeniably one of the hottest new technologies to hit the business world, and companies are racing to learn more about it and how they can apply it to their business. While some dismiss blockchain as the latest consumer buzzword, many liken the decentralized ledger technology to the dawn of the internet, when consumers and technologists were both equally excited about the fascinating new technologies, but things were still too new to be sure about practical uses in our everyday.
Where we're at now
Christian Catalini, assistant professor of technological innovation at MIT and founder of MIT Cryptoeconomics Lab notes that we're still in the earliest stages of adoption and experimentation.
"There has been a lot of enthusiasm about the technology, but actual use cases are still limited. Once this experimentation phase will complete, you will see a few, top applications emerge that will make the technology mainstream, but those are difficult to predict at the moment."
"You're not going to go into Starbucks tomorrow and buy your coffee with bitcoin," added Anders Brownworth, chief evangelist at Circle, a money-sharing application that uses blockchain to let you send money from your phone to anyone, anywhere in the world. "We're not there yet. We're going to continue to use cash for things like that. But where blockchain does allow for things to get interesting is cross-border flow, where you're sending money and needing to swap it into local currency. There's a strong use case there for bitcoin."
When does blockchain not make sense?
Businesses have come to embrace data through practices of proper warehousing, business intelligence and artificial intelligence. But just because you have a lot of data, it doesn't mean that blockchain is the perfect solution for you.
"You may not want that data warehouse published on a blockchain," said Brownworth. "You may not want your financial data on a blockchain. Ultimately, you could have a record of my financial history, perhaps not on a public blockchain but even on a private one."
The future: where blockchain makes sense
Consumers may never be fully aware of the technology in future use cases. In other words, they may rely on blockchain in the future, and they may benefit from it and even use it daily in some applications — but they won't explicitly think of it as using blockchain; they'll just know that, for example, they are able to send money to their friend across the globe quickly and without fees.
"Blockchain will operate in the background," Brownworth said. "Users may not even know they're using it. But they'll appreciate the benefits of it, such as privacy [and] fast payments."
Catalini agrees that applications will be largely in the background, even for many businesses.
"As with consumers, many of the mainstream applications of cryptocurrencies and blockchain that you will see in the next few years may be invisible to small and medium sized businesses," Catalini said. "A blockchain may be used in the back end of a service, but the consumer or small business may no need to know. They may just enjoy lower prices because of it."