As we start another pandemic year with unforeseen challenges, but also lots of opportunities for those who know how to take advantage of them, what can we expect in the tech industry and, more precisely, in the blockchain sphere? Here’s a quick look at some of the blockchain trends expected over the next 12 months.
Over a hundred years ago, supply chains were relatively easy to manage because commerce and goods were sourced locally, often involving a reduced number of actors. However, globalization has changed the supply chain landscape, transforming it into a highly complex network of processes involving multiple actors that range from manufacturers, suppliers, logistics companies, and retailers that need to coordinate and synchronize to function like a well-oiled machine that is in a constant state of motion.
But as society continues to expand, additional pressures are placed on the supply chain system that needs to keep up with the increasing demands and added levels of complexity. As a predominantly paper-based sector, supply chain systems rely on disjointed data systems that lead to information silos which make product tracking a difficult and time-consuming task. This state of information disarray generates a set of industry-wide challenges like lack of traceability, visibility and transparency that propagate down the chain of operations, producing delays, errors and increased costs.
The solution? Blockchain and other DLT platforms can improve product-tracking and traceability to reduce counterfeit products and illegal or inferior ingredients and components. Blockchain technology can also help track assets and shipments, allowing for more transparency throughout the procurement process, from purchase orders and logistics to invoicing and payments. Moreover, blockchain-based supply chains will help the world better prepare for future health crises, by creating more transparency and efficiency in logistics. Read this article for more insights on how the global supply chain can be optimized by using blockchain technology.
This trend has already been adopted by several companies – among them, Microsoft and Amazon – and businesses, while more enterprises are looking at adopting it. Blockchain as a Service (BaaS) is based on the Software as a Service model, and it involves the creation, management and maintenance of cloud-based networks for companies that design, develop and build blockchain applications. The emergence of the BaaS model has signalled an important step in the evolution of blockchain technology because it marks a departure from the initial use case of blockchain, cryptocurrency, marking the expansion of the technology in other areas. Read more about BaaS.
At its core, BaaS enables beneficiaries to leverage cloud services to build, host and operate blockchain-based applications without needing to worry about the technical complexities, costs and operational overhead involved in creating, configuring, maintaining and operating a blockchain. Some of the advantages of BaaS:
Cost-effective: vendors provide all the necessary hardware components, servers, middleware, updates and storage.
High availability: the application is available anytime and anywhere as long as there is an internet connection.
Effective maintenance: the service provider is responsible for maintaining the blockchain infrastructure which gives beneficiaries ample time to focus on their application and develop new features.
Quick deployment times.
When it comes to large global organizations or companies with numerous legal entities, intercompany clearance and settlement often involve multiple enterprise resource planning systems, spreadsheets, and manual processes. As a result of this, reconciliation is often delayed for many weeks after the transaction is complete. Here’s where blockchain comes in. Alongside other DLT platforms, blockchain can improve traceability, transparency, and auditability of intercompany transfers accounting, especially in mergers and acquisitions, by validating and creating a shared, immutable record of transfers.
Business blockchains are being used today to help reinvent how transactions are managed. They can take time and costs out of almost any process, enabling near real-time operations. And they deliver a high degree of accuracy and control, with much less risk than many alternatives. Blockchains perform record keeping using automated, low-cost mechanisms. They enable asset transfer through secure, real-time methods. And they provide governance in the form of smart contracts. Smart contracts enforce contract terms such as payment, and thus enable greater trust to the record keeping. Common finance applications for blockchains include procure-to-pay, order-to-cash, trade finance, intercompany transactions and reconciliation.
Nowadays, social media has an enormous impact on people’s lives. Whether we like it or not, social networks are the most used and popular activity on the Internet. The problem with centralized social media is that the current social networks are based on servers where all information provided by users is stored. Therefore, centralized services are easy to hack. When a company uses centralized storage for user data, any breach of that system exposes enormous data which can fall in the hackers’ hands. We all recall the attack on Facebook from 2018, when the social media giant failed to protect the personal information of nearly 50 million users.
Keeping this in mind, combining blockchain with social media should be another trend in 2022. Thanks to the attributes of blockchain technology, it could be used to ensure that all social media material is untraceable and uncopiable. In addition, users will benefit from more security and control over their data. Speaking in Lisbon in 2021, FTX CEO Sam Bankman-Fried highlighted blockchain-based social media as a big opportunity. “I think social media on the blockchain could be absolutely huge. I think it solves a lot of existing pain points, which are really coming to the forefront of society right now.” Bankman-Fried added that this would require a way to exchange messages in a secure and private way, one that could be accessible to multiple user-interfaces. He also said this protocol would need to be composable and cross-platform.