Blockchain and Smart Contracts Beyond FinTech
A report by Abi Research has concluded that there is great potential for blockchain technology to alter and transform established industries beyond the impact it has had on fintech – the emergence of blockchain-based applications is driving substantial investment in IoT-oriented projects. Some of the findings from ABI Research’s ‘Blockchain Applications: Beyond Fintech to the IoT’ report are presented below.
In addition to transactions, blockchain technology can also be used for communication, identification, ownership, and device management. With continued architecture improvements, blockchain technology is expanding into smart contracts that both people and machines can leverage.
Michela Menting, Research Director at ABI Research, commented: “These pre-programmed, self-executing, autonomous contracts can be used for numerous applications, including: digital identities, governance, asset tracking, and M2M transactions, among many others. Through these evolving technologies, blockchain can affect and perhaps radically transform all kinds of interactions: from business and legal to social and political. While the cryptocurrency market may be maturing, IoT applications are still largely untested. The excitement around Bitcoin’s success is nonetheless fuelling a great many endeavours beyond fintech that are likely to impact the IoT.”
There are currently more than 1,500 start-ups on the blockchain scene but not all are public. Some blockchains are permissioned and private, while others are of a hybrid nature or run by a consortium. Blockchains potential as a market beyond cryptocurrency can be seen through venture capital funding, which hit half a billion USD globally in 2016. Not all distributed ledger technologies are blockchains, as the goals and objectives of the various participants are compelled by other imperatives.
While blockchain has great transformative potential, the technology still has obstacles to overcome. As a nascent technology, it is not immune from vulnerabilities, and unknowns or uncertainties may bar the way to growth and maturity.
Vendors, such as BitNation, Modum, MultiChain, and Riddle&Code, will need to drive interest in blockchain for technology end users and create awareness of how it can be applied in varying applications across many different sectors. Before this, they will need to address issues associated with immutability, scale, cost, and privacy, as well as clarify the legal uncertainties surrounding smart contracts. Above all, they will need to tackle misconceptions about what blockchain can enable and its limitations.