Disruption Update: Revisiting Blockchain and Bitcoin

In the past few weeks, news of Bitcoin has rippled across the transom.

Disruption Update: Revisiting Blockchain and Bitcoin

First, we heard if you bought $5 of bitcoin 7 years ago, you’d be $4.4 million richer and with bitcoin surge, cryptocurrencies top $100 billion in market capitalization.

However, in a marked turnaround this week, we find that bitcoin falls to near one-month low with $12 billion wiped off value since record high 30 days ago. As appealing as a cryptocurrency untethered to a centralized issuing body like the Federal Reserve may be, its value at this stage of development can best be described as optimistically hypothetical. While bitcoin’s explosion has created market capitalization bigger than some large U.S. companies like Ford, John Deere and Delta, its future is still unknown. In June, billionaire Mark Cuban likened the dizzying growth of bitcoin as a “bubble” and “more religion than asset.”

May marked the seventh anniversary of bitcoin. According to Fortune, “The early months of 2017 have been particularly heady days for bitcoin. Since the beginning of the year, the value of the cryptocurrency has surged as it gains legitimacy in countries like Japan. Investors have also come to see the currency as something of a safe haven asset amid geopolitical turmoil – and there’s been plenty of that in recent months, in both Europe and the United States.” In our article, Will the Coder in the Basement Replace the Banker, we addressed the concept of a cryptocurrency like bitcoin disrupting everything we know about financial markets and banking. While the theory of an independent cryptocurrency has power in its potential, is bitcoin the vehicle to fulfill that promise? With no competitive currency other than traditional exchange models as a benchmark, bitcoin still remains an unknown quantity.

What is not in question at this stage is the underlying engine that drives Bitcoin. Blockchain technology is on the precipice to influence and impact nearly every industry across the globe – from banking to brands, healthcare to retail. Any industry that tracks transactions and processes data will be disrupted. With an unimpeachable thread of transactions that practically eliminates fraud and malfeasance from the process, blockchain technology is transparent and reliable in a way that other transactional methods are not. It’s simultaneously decentralized, responsible and secure. According to Blockchain Will Disrupt Every Industry published this week, Vala Afshar, Chief Digital Evangelist for Salesforce, says, “Trust is foundational to all businesses, and blockchain enables entities to seamlessly establish trust and transparency at scale.”

Disruption Update: Revisiting Blockchain and Bitcoin

In our article, Blockchain: The 21st Century’s Revolution, our own Sean Keathley said, “What makes blockchain a bigger deal than bitcoin, and possibly even the internet itself, are the exponential opportunities the concept provides. Blockchain is more than a ledger for bitcoin; it actually works as a database, like a super secure, trackable, visible Excel spreadsheet. It has public visibility, but due to the encrypted coding, also allows for privacy and security.” In banking alone, forward-thinking financial prognosticators are all in. Just this week, 28 global banks are on board to examine and authenticate a new Blockchain application from Swift. These banks will test whether an application of blockchain is able to securely track and reconcile international transactions in real time. These leading-edge banks are a who’s who of global banking including Banco Santander, Deutsche Bank, JPMorgan Chase, and Lloyds Bank, among others.

In addressing blockchain’s impact, Sean Keathley says, “With the distributed ledger technology imbedded in blockchain, banks could actually realize $15-20 billion in savings on infrastructure cost annually by the year 2022. Because they wouldn’t have to implement technology to track transactions or manually enter information; everything bankers need would be embedded into the code. And it’s not just the financial industry that sees potential applications.” That’s why innovators like Virgin Group founder Sir Richard Branson are backing blockchain’s cryptocurrency wallet. Across additional industries, other hot tickets items include a blockchain energy startup raising €4.5m in its initial funding round and Daimler, the parent company of Mercedes-Benz, replacing traditional communication methods with one another using blockchain.

According to Brett Colbert, Solutions CTO and Vice President of Enterprise Architecture at Salesforce in Blockchain Will Disrupt Every Industry, “A wide swath of industries are evaluating blockchain to determine what strategic differentiators could exist for their businesses if they leverage blockchain. Soon to be disrupted industries will include Financial Services, Healthcare, Aviation, Global Logistics and Shipping, Transportation, Music, Manufacturing, Security, Media, Identity, Automotive, Land Use and Government. Blockchain is garnering a lot of attention because blockchain will fundamentally change many of these industries.”We’re at the moment where embracing blockchain technology could be a sink-or-swim moment for many industries, as the legacy technologies many have relied upon will be decidedly dated in the blockchain future. Stay tuned, as this tipping point may well determine what the future looks like.

We’re at the moment where embracing blockchain technology could be a sink-or-swim moment for many industries, as the legacy technologies many have relied upon will be decidedly dated in the blockchain future.”

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