Blockchain looks poised to reshape the global economy – The Straits Times

Non-fungible tokens (NFTs) have recently become the talk of the town, with collectible digital assets launched by celebrities being bought up in droves by eager buyers. NFTs offering access to works of art such as photographs, paintings, media and short videos are at the forefront of the trend. But for investors, blockchain technology that encrypts assets is more interesting than NFTs themselves.

Besides NFTs, another star of blockchain technology is the Bitcoin cryptocurrency. This is not surprising, given that it was the cryptocurrency market that brought blockchain technology to public attention.

A blockchain is an electronic database made up of a set of data packets or “blocks”. When a block is filled, it is connected to the next block, thus forming an unambiguous string of data. Unlike traditional databases, blockchain is decentralized, providing users or network participants with a new way to transmit and store information securely. This technological breakthrough reduces costs, improves efficiency and reduces fraudulent activities, creating an ecosystem with a high level of trust.

Blockchain technology has four major characteristics that give it an advantage over traditional databases:

• Verification of consensus: All network participants share the same documentation, which can only be updated by consensus.
• Decentralized: Control and Decision Making in a Distributed Network maximizes transparency and facilitates resource distribution with less process friction and single point of failure risk.
• Unchangeable: A blockchain The ledger records data permanently. Once data is written to the blockchain, it cannot be tampered with and is permanently stored on the blockchain.
• Secure: Thank you to decentralization, hackers would need to simultaneously control 51% of the copies of the blockchain for their new copy to become the majority copy. This threshold effectively curbs illegal behavior.

Valued economic impact of blockchain over the next decade

With a total market value of US$1.9 trillion¹, the financial and trading power of Bitcoin cannot be underestimated. However, cryptocurrency is only one of the ways blockchain is used. Today, technology has penetrated a wide range of industries, including financial services, healthcare, supply chain management and food safety, in part due to the ongoing pandemic, which has accelerated the digitization of the world, as well as the development and implementation of blockchain solutions. . Market projections predict that by 2027, up to 10% of global GDP could be stored on blockchains². Furthermore, the impact of blockchain on the levels of value creation in the global technology market is expected to reach US$3.1 trillion by 2030.³.

To illustrate how blockchain is reshaping the business model, a the leading retail coffee chain has introduced an initiative using blockchain technology that serves to monitor the entire process from the moment a coffee bean leaves the farm to the moment it reaches a customer’s cup. Additionally, the blockchain is able to create a clear flow of data that the company can use for their inventory management systems and pricing.

Here is another example of blockchain being used in business, this time involving a multinational shipping and logistics operator engaged in container ships, supply ships, and reefer containers. The administration and processing of commercial documents represents approximately 20% of its total shipping costs. After leveraging blockchain technology, the company digitizes and automates the filing of documents, including bills of lading, making it possible to submit, validate and approve documents more efficiently and securely. The introduction of blockchain technology results in significant time and cost savings in customs clearance and movement of goods. Real-time tracking of shipment events powered by blockchain technology also strengthens business risk management while reducing human error.

Thanks to the many advantages of blockchain technology, studies have shown that 22% of companies have already implemented it in 2019⁴.