Blockchain For Business: Beyond Crypto And Bitcoin

Matt Damon encouraged crypto investing in a commercial for Crypto.com that has been viewed nearly 18 million times on YouTube.TThe 2022 NFL Super Bowl LVI represented the peak of popularity, or at least widespread awareness, for the blockchain technology that is at the heart of almost all cryptocurrencies. With the slogan “Fortune favors the brave,” Matt Damon encouraged crypto investing in a commercial for Crypto.com that has been viewed nearly 18 million times on YouTube.

But when the cryptocurrency hit a 16-month low just four months after the big game, investors saw hundreds of billions of dollars disappear in a selloff. And the celebrities who had put their names and faces behind crypto exchanges, including Damon, Reese Witherspoon, Gwyneth Paltrow and LeBron James, began to be criticized for hyping virtual currency without highlighting the risks.

Most celebrities associated with crypto declined to comment except for Jeff Shafer, advertising director for FTX’s Super Bowl commercial starring comedian Larry David. Speaking to the New York Times, Shafer shared, “Unfortunately, I don’t think we have anything to add, as we have no idea how cryptocurrency works (even after having it explained to us repeatedly). We just set out to make a fun commercial.”

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Crypto’s volatility may underscore a fundamental problem with celebrity marketing. Perhaps more importantly, it also reveals a widespread lack of understanding of crypto and blockchain, the technology that enables its existence. But those business leaders who understand the technology still expect blockchain to have a bright future.

Is this a naturally rocky period for blockchain technology?

Although the implosion of the crypto market has rattled investors and caught the attention of regulators, where some see a setback, others see signs of a maturing industry.
Some experts believe the shakeup will reveal viable blockchain projects versus those that have been sustained on marketing hype. Others compare what is happening in crypto and blockchain to the tech industry in 1999-2000. In 2000, at the height of the tech stock boom, Nasdaq’s IPOs raised $54 billion. Between 1995 and 2001, 439 dot-com companies went public. But in 2002 the dot-com speculation ended. The Nasdaq, which rose fivefold between 1995 and 2000, saw a drop of nearly 77%, resulting in a loss of billions of dollars and the demise of many start-ups.

Triggered by the rise and fall of tech stocks, the tech bubble burst, and the overvaluation of tech stocks was massively corrected; But technology-driven businesses certainly did not disappear.

The growth of blockchain technologies has also been rapid. The blockchain or public ledger for Bitcoin, the first cryptocurrency, began in 2009. Since then, the field has grown to more than 10,000 cryptocurrencies.

Mark Cuban, who made his first fortune in technology in the 1990s, compares today’s climate to the dot-com boom of the 2000s. He explained in a tweet: “After a recent wave of ‘exciting’ blockchain-based innovations in the crypto space – including non-fungible tokens (NFT), decentralized finance (DeFi) and play-to-earn applications – there has been an ‘imitation phase’ where new blockchains copy popular existing applications and bring a variation of the same to the market.”

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Cuban told Fortune magazine that he thinks we’ll see a “consolidation phase next,” where copycat blockchains will die out.

Blockchain Potential: Beyond Currency

While Bitcoin, Ethereum and other cryptocurrencies or altcoins became intensely popular among the general financial and investment worlds, blockchain technology is still full of potential for companies across many industries. Blockchain technology may ultimately be the most useful innovation to come out of the cryptocurrency boom.

Blockchain technology, the system for recording transactions across a global network of computers, is sometimes described as a shared digital ledger. Driven by the promise of safer, more efficient, unregulated transactions, the financial industry led the way in leveraging blockchain and other distributed ledger technologies (DLT). But they are not alone.

As the potential emerges for blockchain and other DLTs to enhance the efficiency of business operations and create new ways to deliver value, many forward-thinking companies in other industries have begun to integrate these technologies into existing infrastructure.

Also read: Cryptocurrency to NFTs: Should you invest in digital assets?

In fact, the vast majority of participants in Deloitte’s 2021 Global Blockchain Survey (80%) say their industries are set to see new revenue streams from blockchain, digital asset and/or cryptocurrency solutions.

Blockchain Technology: How Does It Work?

Business relies on information. The faster it is received and the more accurate it is, the better. That is the power of blockchain. Industry leaders are using blockchain to drive greater transparency and truth across the digital information ecosystems, to remove friction in business activities and interactions, build trust and unlock new opportunities for value.

1. Definition: Blockchain is a shared, immutable ledger that simplifies the process of recording transactions and tracking assets in a business network. All network participants have access to the distributed ledger and its immutable (or immutable) record of transactions. No participant can change or tamper with a transaction after it is recorded in the shared ledger. To speed up transactions, a set of rules or programs – called a smart contract – is stored on the blockchain and executed automatically.
2. Assets: An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyright, branding). Virtually anything of value can be tracked and traded on a blockchain network.
3. Data block: As each transaction takes place, it is recorded as a “block” of data. These transactions show the movement of an asset. The data block can record the information you choose: who, what, when, where, how much and even the condition – for example, the temperature of a food shipment.
4. Blockchain: Each block is connected to the ones before and after it. These blocks form a chain of data when an asset is moved from place to place or ownership changes hands. The blocks are securely linked together to prevent a block from being changed or a block from being inserted between two existing blocks.
5. Irreversible chain: Each additional block strengthens the verification of the previous block and thus the entire blockchain. This removes the possibility of tampering and builds a ledger of transactions that you and other network members can trust.
6. Public: A public blockchain is one that anyone can join and participate in, such as Bitcoin.
7. Private: A private blockchain network, like a public blockchain network, is a decentralized peer-to-peer network. However, an organization manages the network and controls who can participate.
8. Hyperledger: A hyperledger is a global enterprise blockchain project that provides the necessary frameworks, standards, guidelines and tools to build open source blockchains and related applications across various industries.

Business opportunities and applications

Financial services have been leading the way in utilizing blockchain, but the benefits extend far beyond. Benefits include increased transparency, accurate tracking, a permanent ledger and cost reduction. Possible applications include energy markets, digital identity, supply chain and healthcare.

Examples of companies using blockchain to make the Internet of Things (IoT) safer and smarter include:

1. HYPR prevents cybersecurity risks in IoT devices with its decentralized credential solutions. By removing passwords from a centralized server, and using biometric and password-free solutions, HYPR makes IoT devices virtually unhackable.
2. Insurwavea collaborative project between the consulting firm EY and the blockchain company Guardtime, delivers a blockchain platform aimed at marine insurance.
3. BurstIQa Denver-based startup, was the first healthcare-related blockchain company to successfully develop and commercialize a blockchain-based big data platform that enables large, complex data to be stored, managed, shared, analyzed and monetized on a secure, HIPAA-compliant blockchain.
4. Daimler has partnered with Singapore-based Ocean Protocola decentralized data exchange, to explore how blockchain can help share supply chain data between manufacturing hubs and partners.
5. Amsterdam-based construction company HerenBouw used a blockchain to document transactions during a major development project in the city, creating a more accurate, auditable record of the orders placed and paid out.

What’s next for blockchain?

Mark Cuban may be leading the charge, but many investors and global business leaders remain bullish on blockchain. Cuban has stated that the biggest opportunity for crypto companies and blockchains is to use Smart Contracts, the collections of code that execute a set of instructions on the blockchain. In a May 2020 tweet, Cuban said:

“What we haven’t seen is the use of smart contracts to improve business productivity and profitability. That has to be the next driver. When businesses can use smart contracts to gain competitive advantage, they will. The chains that realize this will survive.”

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