Blockchain: Beyond Bitcoin Revolutionizing Business with Disruptive Potential

Blockchn: Unleashing its Potential Beyond Bitcoin

The ongoing debate over the fate of cryptocurrencies such as Bitcoin has escalated into a frenzy since the beginning of this year. On one side, Goldman Sachs forecasts that most cryptocurrencies will inevitably plummet to zero, while the head of the World Bank warns they resemble Ponzi schemes. Conversely, entrepreneurs-turned-venture capitalists, the Winklevoss twins, predict that Bitcoin's value could soar up to forty times its current price.

This heated discourse, however, distracts from a larger narrative: the transformative potential of blockchn technology-the foundation behind Bitcoin and other cryptocurrencies-is poised to revolutionize business as eml and the internet did previously.

Blockchn allows two parties to digitally transact with each other using an immutable, continuously-updated, distributed ledger without needing a central authority to oversee it. In the case of Bitcoin, transactions are validated by competitive bookkeepers known as miners who receive newly minted currency as rewards.

Just as eml's enabled information transfer between users, blockchn facilitates value transfer from one party to another. This has significant implications for traditional intermediaries like auditors, lawyers, public notaries and entire industries might face existential threats without radical transformation.

For instance, e-commerce currently heavily relies on third-party platforms such as Visa or PayPal to process electronic payments, charging fees of three to five percent. Overseas money transfer firms like Western Union and MoneyGram impose even higher charges-often over ten percent. These sectors seem ripe for disruption with the growth of blockchn, potentially leading to the downfall of financial remittance companies akin to travel agents' demise in the 1990s.

At a national level, an increasing number of countries are exploring how to implement their currencies on blockchn technology. The Monetary Authority of Singapore MAS, for example, partnered with banks to develop Project Ubin-a pilot tokenized version of the Singapore dollar that replicated existing financial payment systems without centralised clearing mechanisms. They are now working on similar projects focused on fixed income securities trading and cross-border payments.

Blockchn's transformative potential transcs finance industry boundaries. Harvard professors recently wrote in a Harvard Business Review article that blockchn could reshape economic, social, and political systems. The article forecasts a future where every agreement, every process, every task, and every payment would have digital records and signatures that can be identified, validated, stored, and shared.

By enabling businesses to control their own data, ensuring immutability and transparency, blockchn holds significant promise in areas like inventory management, food safety including medical records, among others.

IBM and Danish shipping giant Maersk announced a joint venture using blockchn technology for the shipping supply chn sector-handling about $4 trillion worth of goods annually, they expect savings up to forty percent thanks to blockchn innovations.

The most crucial risk comes from regulatory bodies' response to this emerging phenomenon. Some governments like Bangladesh, Nepal, and Vietnam have banned cryptocurrency transactions outright. China and South Korea introduced stringent measures recently by restricting trading in cryptocurrencies; Hong Kong and Singapore took a more balanced approach.

Perhaps the most significant sign came when J. Christopher Giancarlo-the Chrman of Commodity Futures Trading Commission-testified before a US Senate panel. His perspective was that distributed ledgers have potential to enhance economic efficiency, mitigate centralized systemic risk, def agnst fraudulent activities, and improve data quality and governance. Consequently, he added, the right regulatory approach for blockchn technology should m to do no harm.

This statement marked a turning point as blockchn entered mnstream discourse.

For investors in cryptocurrencies, given their volatile price movements, speculative nature, lack of pricing, investing in specific assets like Bitcoin or Ethereum remns highly risky. Most retl investors are advised agnst such investments due to their inherent risks.

However, for businesses considering an investment in blockchn technology, it might be a prudent strategic move. As the technology's potential continues to expand, innovative companies leveraging creative and disruptive applications will emerge that existing firms and industries cannot afford to ignore.
This article is reproduced from: https://bizbeat.nus.edu.sg/thought-leadership/article/1385/

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