Impacts of blockchain

Blockchain has the potential to fix many problems on a global scale, and to impact many industries.

There is a large number of industries that have become stagnant, centralized, and inefficient, thereby proving unable to grow economically in their current state, create value, or solve existing problems. In the case of such industries, what we need is a technological revolution, and blockchain is ready to lead the charge!

Impacts in the financial sector

The financial sector will be among the first to be disrupted by blockchain technology. The previous major technological innovations in the financial sector, the ATM and the credit card, were introduced way back in the 1950s and 60s.

Not only that, but according to the World Bank, their most recent study found 2 billion people who are unbanked. That's over a quarter of the entire global population! As you can imagine, this stunts global economic progress significantly. Not to mention that the unbanked people, who are mostly from developing countries, are at a clear disadvantage. It is difficult enough to increase productivity and trade within their own country, let alone transacting with the rest of the world. Many people consider the fees for sending money overseas for these populations unfair. Money transfer services, such as Western Union and MoneyGram, were charging 10% on average in 2008, and 7.5% in 2016. Blockchain technology can disrupt the status quo and bring this to a halt.

It can bring new, efficient solutions—not just for money transfers, but also for global trade finance, clearing and settlement, insurance and securities trading, and many more financial services and products.

But, it's not just the client facing side of finance that blockchain technology can improve. It can also streamline compliance and regulatory functions, such as anti-money laundering (AML) and know your customer (KYC).

Impacts in our daily lives

Blockchain technology can also be applied to accounting and auditing, healthcare, the media, consumer goods, logistics and supply chain management, power and utilities, the internet, and even the government. We will delve into these areas in Chapter 10, Blockchains Focused on Specific Sectors and Use Cases. For now, let's give you a little taste of the ingenious ways that some companies are trying to apply blockchain, in order to change peoples' lives for the better.

The Chinese formula scandal

Do you remember the awful Chinese infant formula scandal in 2008?

300,000 babies fell victim to melamine being added to baby formula. Melamine is a chemical used to produce plastics, which you'll find in your everyday whiteboard. When added to milk, the chemical appears to contain higher protein content, which was a dirty trick that led to many infants being hospitalized.

The effects of this scandal were felt worldwide, and they destroyed the reputation of China's food export industry! At least 11 countries refused to import dairy products from China. Chinese retailers would travel to Australia and other countries to buy huge stocks of their baby formula. And the Chinese government even executed several individuals involved in the scandal. Sadly, this is not an isolated incident. Many other companies use illegal and immoral ingredients in their foods and other consumer products, often being discovered after it's too late.

That's where blockchain technology can come into action. It can help to remedy and prevent counterfeit consumer goods. A startup called WaBi is working on resolving these kinds of problems. By combining blockchain and radio-frequency identification (RFID) technologies, they can track and verify the authenticity of all ingredients and components used in consumer goods.

Blood diamonds

Another example comes from a company called Everledger, which is working to resolve the long-standing issue with blood diamonds. Their aim is to track the origin of each diamond and record it on an immutable blockchain database.

Similarly, other startups are aiming to solve the problems of counterfeit art and other luxury goods with blockchain technology.

Gradually, distributed ledgers will become a part of our everyday lives in many different areas, helping to improve the way that we make payments and investments, the way that we register our properties, how we verify our identity, and even the way that we vote in elections.