When blockchain emerged onto the scene, many speculated that it would change the world, and there was a lot of hype surrounding the new technology. That was around ten years ago though, and over the years, blockchain has struggled to be validated or deployed at the same speed as other new technologies, such as the cloud or AI.
However, 2019 was the year blockchain was slowly coming into its own. The financial markets were beginning to understand what the distributed ledger technology can do and its use points beyond powering cryptocurrencies like Bitcoin became clear.
We started to see real-life deployments and advances start to develop. New blockchain alliances, such as Enterprise Ethereum Alliance, increased blockchain start-ups and introduced new infrastructure projects.
These advances led to most analysts and commentators predicting a positive future for blockchain when we entered 2020 for the adoption and adaptation of blockchain in an enterprise context. Shortly after this promising start to the new year and decade though came the sudden outbreak of COVID-19, with the threat of the novel disease being so severe and far-reaching that the whole world stopped in its tracks.
Ever since lockdown began in many countries around the world, financial market participants have experienced high volatility and some of the sharpest levels of contraction in history. World leaders are fearful of another global recession – especially as it will be much harder to recover from than other previous economic collapses – but innovations in blockchain can provide us with some hope that it might not all be doom and gloom.
Next generation of blockchain in a new world
According to the World Economic Forum, technologies such as blockchain “will benefit all countries currently impacted by COVID-19”, as it provides an efficient approach to reduce trade cost on a global scale.
We are certainly seeing a rise in organisations taking a competitive advantage as they adopt next generation blockchain that has been redesigned and rearchitected to meet the rigorous demands required within the financial industry. These organisations are paving the way and showing the industry how blockchain can be used intelligently for the new world we live in.
For example, R3 is an enterprise software company that works with an ecosystem of over 200 financial institutions, regulators, trade associations, professional services, and technology companies to develop Corda. This is a blockchain platform that is specifically designed for businesses to be able to deliver two interoperable and fully compatible distributions of the platform that addresses issues such as transactional certainty, data privacy, and scalability limitations.
One fundamental area where the impact of COVID-19 exposed significant weakness was our global supply chains. As countries suffered from the effects of the disease and simultaneously enforced lockdown measures, our supply chains were upended and we witnessed severe disruptions across all resources, including critical healthcare supplies being able to reach keyworkers.
This is where the “visibility, traceability, and interoperability” of blockchain platforms is crucially supporting efforts to battle the virus and help stabilise our economies. Blockchain technology uses cryptography to generate an undisputed record of transactions and operations, thereby no longer requiring physical proof points and centralised validation.
In this way, organisations are better able to manage and control their supply chains remotely, and even adapt if necessary, to react to the changing circumstances during the coronavirus crisis.
Collaboration will be key
One of the calls we have increasingly heard following the outbreak is the importance of countries, businesses and communities showing solidarity. The notion of coming together and collaborating to face the ensuing economic crisis can most definitely be applied to blockchain as well.
Application service providers and subscribers should partner together with service and product providers at an operational level integration to get ahead of the blockchain curve. We are seeing real value with the integration and support from hyper-scale platform communities, such as Microsoft Azure and AWS, together with open industries, such as IPC’s Connexus Hub that create end-to-end solutions that solve business problems.
As with many other technologies, there is a rapid shift towards API (application program interface). APIs support partner integration and enable institutions to easily access data, provide insights and inspire innovation for the company and market need.
Service providers can play an essential role in supporting blockchain operationalisation in the systems-oriented context, as providers are natural connectors that embed connectivity to key market participants. For example, IPC has access to all asset classes and trading methods with over 2,000 sell-side, 4,000 buy-side and over 75 exchanges.
Certainly, by no means is blockchain a magical revolution that can solve the world’s economic woes, but now is the time for companies to invest in its operationalisation and deployment given the possibilities it can offer in certain situations, such as our critical supply chains.
Digital initiatives like blockchain are non-partisan and open to all, and this grants users the ability to act quickly at low cost with low barriers for innovation. These are all valuable factors in regaining stability and keeping the economy on its feet. Hence, for many reasons, 2020 will be a coming of age year, but particularly for blockchain.