Would you believe that one of the poorest countries of West Africa, Nigeria, is showing unprecedented growth? Nigeria’s financial institutions are outperforming and accounts for overwhelming 24% of the total country’s GDP.
Part of this growth has resulted from the fact that emerging markets are embracing blockchain technology in IT and financial sector on the national level.
A lot of people when heard the term blockchain, they instantly believe that it is another name for cryptocurrency. Some people also assume that it is some kind of tech that is used purely to facilitate digital currency transactions.
Well, you are totally wrong if you are one of them.
What is blockchain exactly?
By definition, blockchain is a kind of shared and decentralized digital ledgers with a synchronized database that record peer-to-peer transactions securely across different nodes.
All of these processes take place without the involvement of third parties that usually transfer assets. Third-party providers usually include brokers, banks, governments, and exchanges.
It sounds a bit mundane, but trust me blockchain has the power to change the face of IT business forever.
Reasons why you should invest (or not) in blockchain technology
Here are some reasons why you should consider investing in blockchain technology.
1. There’s already an upward trend
The blockchain technology adoption is steadily growing.
An upward trend has been observed in terms of acceptance and popularity of blockchain technology over the past decade. According to the latest findings by Statista, the global spending on blockchain technology is set to grow from $1.5 billion in 2018 to $15.9 billion as of 2023.
Image Source: Static.Coindesk
What are the major drivers of growth?
The need to simplify complex business procedures and to want a reliable supply chain management system, are the two main key drivers of growth behind blockchain technology. According to a source, these drivers will extend the estimated growth of the blockchain market from $3 billion to $39.7 billion between 2020 and 2025.
2. It makes you efficient
Speed is a crucial factor that still acts as a competitive advantage for many businesses.
Any businesses investing in blockchain technology can be benefitted in a variety of reasons. The tech has already set the standard for digital transactions and shows huge potential for accelerating business processes. For maritime and supply chain sector, blockchain technology is a game-changer.
Blockchain technology for speedy financial services
The major reason behind the increasing adoption of blockchain technology in the financial services sector is that it makes it efficient in the following ways:
- Regulatory monitoring is improved due to enhanced transparency among financial institutions.
- It enhances capital optimization by eliminating the need for a third party.
- The recorded data is immutable and can be tracked in real-time, thus reducing error handling.
- Large transactions that generally took a week to settle can be settled instantly within seconds and minutes.
- It reduces the need for staff at banks which reduce the operational cost of financial organizations.
3. Enormous potential
As mentioned earlier, the blockchain market is estimated to grow at a high growth rate of 67.3%. This growth is fueled by the potentially high number of business investment and funding in blockchain technology.
With blockchain technology, companies can not only make cryptocurrency transactions, but they can also receive and send payments across the world instantly. Plus, you can set up self-executing deals, store data, watch out your supply chain processes and prove provenance.
And most importantly, you can streamline business operations and improve them with blockchain technology. Not only this, this tech removes the data security, identity theft, and privacy concerns of businesses. A range of new possibilities is opening up for businesses and global sectors.
Evidence from the retail sector: the case of Wal-Mart
Analysts suggest that blockchain will see a rise in the supply chain of the retail sector. In a recent partnership agreement, IBM and Wal-Mart agreed to formulate a food safety blockchain system that injects transparency into the digitized food supply ecosystem.
Image Source: Theleadershipnetwork,com
Basically, IBM helped Wal-Mart to have in place a food traceability solution based on Hyperledger Fabric, an open-source ledger tech.
Blockchain is helping Wal-Mart’s supply chain in a few ways:
- Since Wal-Mart is a huge retailer, its supply chain is also complex. The adoption of blockchain technology has simplified the supply chain of Wal-Mart by ensuring the authenticity of goods, whether the goods meet the safety requirements, and whether they are sourced ethically or not. Previously, all of this was difficult without blockchain technology.
- The tech is helping the giant merchandising retailer in safely managing customer data while identifying the precise needs and preferences of customers.
The R&D team a Wal-Mart claims that the new system has significantly declined the time needed to trace the supermarket’s provenance from 7 days to just 2.2 seconds. Isn’t it amazing?
A depiction of how blockchain tech enables food tracking across the Wal-Mart supply chain:
Image Source: Digital.hbd.edu
Besides this, the use of blockchain tech will continue to rise in the financial industry.
4. Trading in volatile market = high returns
From the investor’s point of view, high volatility means greater returns. This is an old school principle that is still valid today.
Generally speaking, an unstable financial market is not good since it will negatively impact the governmental activities as well as the private sector. You’ll be surprised to know that this rule doesn’t apply to cryptocurrencies. The reason is simple.
Since blockchain technology is not volatile and is not backed up by anything, it is the best opportunity for investors to earn higher returns. Until both blockchain and cryptocurrency get adopted by masses, investing in both is highly risky and also yield high returns than the rest of the stock market.
If you are risk-averse investor, it will best for you to carry out independent research and find stable projects that would give you promising returns.
5. Big businesses and governments are embracing it
If you still think that we’ll all inevitably move to the blockchain technology in the near future, there are some facts you don’t know.
Blockchain technology has already gone mainstream some years back. A lot of big companies are investing in blockchain technologies and exploring their potential to enhance their operational efficiency.
With blockchain technologies, companies and governments can invest in areas where they see the possibilities for growth and profits. Some of the early adopters of blockchain technology
- Tech: Microsoft, Google, IBM
- Banking and finance: Barclays, Bank of America, HSBC
- Consumer goods: Wal-Mart, Unilever
- Healthcare: Pfizer, DHL (drug distribution)
- Insurance: AIA Group, Prudential
- Travel: Lufthansa, British Airways
- Commercial property: JLL, Westfield
6. It’s compatible with new technologies
Some of the revolutionary technologies that have already made their way into human lives are Internet of Things (IoT), AI-led chatbots in customer service and healthcare, immersive technologies like artificial reality (AR) and virtual reality (VR) in movies, tourism, and advertisement.
Did you know that 75 billion new IoT devices will be added in the digital mobile communications sector? What’s more, the blockchain technology will be used a key technology for data management in the coming future (Statista).
Image Source: Blog.allgeier
It wouldn’t be wrong to say that these technologies can improve their value proposition when combined with blockchain. The suitability of the above-mentioned emerging technologies will expand their usability.
AI and blockchain: how this synergy will work?
Experts believe that AI and blockchain make a powerful pair. Blockchain technology creates a perfect combination for the large-scale enterprise database management by providing heightened security to artificial intelligence and big data applications.
From making a tastier latte to predict storms and from fighting the opioid crisis to secure sharing of medical data, blockchain and AI is a perfect match.
What are some examples?
BurstIQ is a blockchain solution provider that creates a ‘Health Wallet’ app based on AI, big data, and blockchain technology with the intention to empower healthcare professionals and patients to manage medical data.
Image Source: pngitem.com
The app allows healthcare consumers to access their medical records and make informed health decisions while clinicians can buy or use this data for scientific studies or finding treatment for chronic diseases.
7. It’s becoming cheaper and accessible
We all know that tech is getting cheaper. As reported by McKinsey & Co. in a 2018 article, ‘cost will be removed from the existing processes by eliminating administrative efforts and third parties involved in record-keeping’.
If you are thinking that investing in blockchain is similar to investing in stocks, then this is not the case. Making an investment in the blockchain is very simple and inexpensive. All you would need to do is to invest in making an account on the online exchange platform and purchase the currency you wish to.
Remember that you need to be very careful which choosing the currency to invest in. Some of the blockchain stocks that investors can consider the following:
- CME Group
8. A promising future
What does the future hold for blockchain technology?
The future of blockchain technology is bright. In fact, blockchain technology is here to stay. The tech has changed the way banks and financial institutions work.
Even if you buy the best assignment writing service for this topic, you’ll find numerous pieces of evidence supporting investment in the blockchain technology.
Future predictions have already developed a positive financial picture. According to this picture, so many businesses from different industries will be looking for ways to embed blockchain technology into the business model and gain revenues.
Ways to invest in blockchain
Here are some of the ways in which you can invest in blockchain technology for your business.
- Blockchain penny stocks: Penny stocks pose a high risk to the investor but also yields a high return.
- Angel funding and startups: It’s not a new concept. You provide funds to the startups. Who knows the startups turn out to be the next IBM, Google, or blockchain frontier?
- Pure blockchain technology play: It is a low-risk investment option where you invest in stocks issued by major financial players experimenting with the blockchain tech.
To invest or not to invest
Considering the above-mentioned arguments, stats, and figures, it can be said that investing in the blockchain technology would be a wise decision. Because of the tech’s immense benefits and widespread continuously growing adoption, blockchain technology is the future of tech.
Still, blockchain technology sounds like a distant dream for small companies. It is important that big high-tech companies invest in blockchain technologies and set a standard for the entire industry.
Amanda Jerelyn is working as an IT Manager at Dissertation Assistance, a platform that receives hundreds of write my essay UK requests. She is also a part-time freelancer and a WordPress expert. Besides this, she’s a travel enthusiast and love going on solo trips.