Varun Garg, Acuant’s Director of Cloud and Mobile Products, recently contributed this article to DevPro Journal. You can read his article below. To read the original, click here.
Blockchain is an immutable decentralized way to securely store data in blocks that are linked to each other using cryptographic principals. In late 2017, bitcoin and other cryptocurrencies became the center of many conversations among millennials and tech experts alike. Just two years later, many believe that cryptocurrencies are dead. But there are numerous emerging groundbreaking blockchain related business opportunities that will disrupt established businesses and ways of doing things.
Here are four disruptive, blockchain-related opportunities.
Blockchain can be used to transfer assets from one holder to another globally and instantly. Current financial markets limit trading to a country or a continent. For example, NYSE, Japan Exchange Group, Euronext, etc. Today when we trade stocks, it takes a few days for a trade to settle and for us to withdraw the money. We have yet to see a global decentralized financial market where anyone can trade any asset and trades are settled instantly on the ledger.
Imagine a world where you could trade almost anything from stocks to precious metals to fiat or cryptocurrencies to ETFs, and you could interchange from one asset to another instantly for pennies. Decentralized exchanges (DEX) solves the problem where no institution or country or a group of servers have the central authority making it impossible to hack or implode.
Money Transfer and Micropayments
Bitcoin once was promoted as a digital way to transfer money from one person to another locally and globally instantly. As of today, it takes around $0.88 and 10 to 20 minutes to transfer money using bitcoin, making it very inefficient. If you are doing a money transfer from your bank account to someone’s bank account overseas, it may cost you a 1 percent to 5 percent transaction fee and may take two to five days for the transaction to process and settle as funds are routed through many intermediary banks.
Thanks to technologies built using blockchain such as Ripple or Stellar Consensus Protocol, money can be transferred from one bank account to another globally within seconds for just a few cents.
This practice can also be expanded to micropayments. Credit/debit card network fees are not cost effective for micropayments. If you had to pay 2.9 percent + $0.30 on a $0.50 transaction, you’d be paying about 63 percent. Even on a $3.00 transaction at 2.9 percent + $0.30, you are left paying about 13 percent overall. With technologies built using blockchain, network fees can be reduced to a fraction of a cent.
Google, Facebook, Twitter, Pinterest, etc. have built an incredible business by showing us digital ads. They store all our data and sell it to advertisers. Have you ever wondered why you don’t pay to use their services? Is there something free on this planet?
Your data is worth hundreds of dollars to these companies. You are the product. Blockchain-based technologies aim at fixing the web by blocking all the ads we see in our web browsing experience and rewarding us for our attention. Today, our screens are full of ads shown to us based on our browsing history. Shouldn’t we be in control of the ads shown to us instead of having them forced on us? And if we see ads, shouldn’t we be rewarded to pay attention to these ads?
The multibillion-dollar digital advertising industry is in crisis. User privacy has become a casualty in an ever-increasing consumer-surveillance ad model that relies on tracking and profiling users. Publishers and content creators are shutting down or retaliating with self-destructive tactics as users enable ad-blockers in response to privacy violations, irrelevant ads and malvertisements. Ad fraud is rampant throughout the system, and advertisers are struggling to find solutions that comply with new GDPR/ePrivacy regulations. This is a fundamentally unsustainable state of affairs.
Typically, you would go to a lawyer, spend a lot of money and wait for days for the contract to be drafted and agreed upon by both parties. With Smart Contracts, you can do this same process through blockchain. Suppose you want to rent an apartment from me. You get a receipt which is held in our virtual contract; I give you the digital entry key which comes to you by a specified date. If the key doesn’t come on time, the blockchain releases a refund. If I send the key before the rental date, the function holds it, releasing both the fee and key to you and me respectively when the date arrives. The system works on the If-Then premise and is witnessed by hundreds of people, so you can expect a faultless delivery. If I give you the key, I’m sure to be paid. If you send the amount defined in the contract, you receive the key. The document is automatically canceled after the time, and neither of us can interfere with the code without the other knowing since all participants are simultaneously alerted.
Smart contracts can be used for all sort of situations that range from financial derivatives to insurance premiums, breach contracts, property law, property sales, automobile sales, credit enforcement, financial services, legal processes and crowdfunding agreements.