2017 saw the rise to prominence of cryptocurrencies, namely Bitcoin but some of its derivatives (Ethereum, Bitcoin Cash, LiteCoin) skyrocketed in value. Whilst cryptocurrencies have garnered world-wide attention, it is the Blockchain technology behind it that is of true importance and potential.
Bitcoin enthusiast John Pham describes Blockchain as ‘a distributed database that maintains a continuously growing list of data records that are chained together free from tampering or revision’. To elaborate, the distributed database is like a shared record book, its owned by anyone who has a copy (or who is participating) this could be home computers or business servers. Each transaction is verified by a set these of distributed networks, it is then encrypted and added to the ‘chain’ which cannot be amended or removed.
Blockchain is primarily used for cryptocurrency transactions however the combination of transparency and security has the ability to remove intermediaries (the middleman). As such, Blockchain has a prospective future that has already started being developed into applications that will send certain industries crumbling.
The popularity of Uber cemented the ‘sharing economy’, whilst the concept of ride sharing seemed faultless, ‘Uber’ as an intermediary has become problematic for drivers and passengers alike.
Uber is a service that is considered to be ‘smarter’ than a taxi, however, Uber is known to surge fares up to 4x the average price in high traffic areas, certain time of day and the demand. As well as this, Uber drivers in the U.S pay a whopping 25% commission of their income on top of phone fees, insurance, petrol and general maintenance.
Up and coming ICO’s such as Cryder and LaZooz use blockchain technology to safely connect drivers and passengers without the use of an intermediary, resulting in more profit for drivers and cheaper fares for passengers.
Blockchain also poses as a threat to online hospitality marketplaces such as AirBnB, Expedia and Bookings.com which currently monopolise the travel industry. Like Uber, AirBnB have their own fees, these include a guest service fee (12%-16%), a homeowner commission fee (5%) and a transaction fee (3%) for each booking.
For example, a 10 night stay at $100 per night at an AirBnb would cost $1000 this would increase to approximately $1243. However, Blockchain based competitors are becoming a reality and present themselves as an attractive alternative. Instead of charging handling and service fees, a direct and secure transaction will be paid to the homeowner.
Using Blockchain technology to record and maintain land registry data will combat fraud and increase efficiency. Blockchain is transparent and secure, it has provided an appealing solution to growing issues with fraud.
Each property would have its own unique code linked to a smart key, held solely by the home owner. Countries such as Sweden, Ukraine and the United Kingdom are in the process of trialling this. Similarly, this system is already being adopted by parts of India (in conjunction with ChromaWay) where it is estimated $700 million is being paid in bribes to land registrars.
The public benefits system is notoriously tedious and bureaucratic. Using Blockchain technology means that the public sector will have an on-call and organised record database free from corruption or tampering.
ICO’s such as GovCoin have been working in tandem with the U.K government on trialling a distribution welfare system based on Blockchain technology.
The Music Industry:
When Spotify launched in 2008 to combat music piracy, artists and fans hailed the music streaming service. However, Spotify is a business and an intermediary meaning it gets a percentage of the profit, in fact artists only receive $0.006 – $0.0084 (USD) per play.
UJO Music and VOISE are two blockchain applications that allow you to listen to songs, you are charged one or two cents per play and it is paid directly to the artist.
In countries where voter fraud and election rigging are commonplace, ICO’s such as Follow My Vote and Horizon State are using Blockchain technology to maintain legitimacy and democracy. Instead of using Bitcoin or a cryptocurrency, these applications issue you with a token which you use to lodge your vote. Once you’ve used your token to vote it is recorded in the immutable, decentralised ledger which hinders corruption from any party.
Most Blockchain applications are still in their early days, it certainly has a bright future, its ability to make intermediaries redundant will disrupt many industries. It also will ensure legitimacy and efficiency or certain government procedures. Whilst there is still a lot of speculation surrounding Blockchain and cryptocurrencies, Milnsbridge are actively researching and developing a range of Blockchain related services that will benefit our customers.
This article is a part of our Crypto series blogs.