Shaping Tomorrow believes that the financial services industry will be dominated by blockchain technology. The possible development of a traceable global currency complete with an efficient infrastructure would result in massive cost reduction for all market participants and transform global banking. This would become a reality if central banks recognize digital currencies.
Experts are finding new frontiers of blockchain technology innovation, adding to the well-known applications in financial services sector and cryptocurrencies like Bitcoin and Ethereum. This article discusses some of these future frontiers.
Digital Identity
Today, digital security is a major challenge in the world, causing massive losses. Blockchain technology carries the promise of making tracking and managing digital identities secure and efficient. This is significant because identity authentication and authorization are key in commerce and other sectors including healthcare, banking, national security, citizenship documentation and online retailing. Hacking of databases and breached accounts are some of the common problems in a technologically advanced society without identity-based solutions.
Distributed Cloud Storage
Ordinary cloud storage services are centralized requiring the user to put trust in a single storage provider who controls all your online assets. Blockchain technology will decentralize these services. As a user, it will be possible to rent out your excess storage capacity, creating new marketplaces. Storj and Factom are some of the startups that have been working on blockchain powered cloud storage. The idea behind it is that once you encrypt your data, it is then sent out to a network with an easy to track basic metadata.
Digital Voting
Security has been the main hindrance to online electoral processes. Indeed, after the 2013 Estonian municipal election, the first ever large scale internet voting, observers concluded that the process was insecure. Similar concerns led Norway, and more recently, Germany to cancel electronic voting. Blockchain technology comes with a new promise. As a voter, you will be able to check and confirm that your vote is successfully transmitted and still remain anonymous to the rest of the world. Blockchain voting was tested in 2014 by the Liberal Alliance, a political party in Denmark.
Smart Contracts
Scientists develop smart contracts by implementing legal contracts as variables and programmes which can release funds using the bitcoin network as a third party executer in the place of a central authority. A good illustration would be where two people exchange a certain amount in future once particular conditions are met. The conditions, amount to be paid out and the details of the parties would be programmed into the smart contract. As soon as the defined conditions are met, funds are automatically released to the relevant party. Smart contracts have the potential of improving business efficiency.
On this point, Vitalik Buterin, founder of Ethereum has this to say “Smart contracts solve the problem of intermediary trust between parties to an agreement, whether that is between people transferring assets like gold, or executing decisions between two parties in a betting contract.”
