Around the world, efforts are being poured into finding a cure for the coronavirus and ensuring the global economy avoids another recession. In the meantime, technology is playing an integral part in keeping our daily business and personal lives running as smoothly as possible. The next generation of blockchain technology is no exception to this rule.
In fact, the World Economic Forum believes that technologies such as blockchain “will benefit all countries currently impacted by COVID-19”, as it provides an efficient approach to reduce trade cost on a global scale. So, how can blockchain help the world economy during this challenging time for the markets?
The new generation
Before 2019, the hype around blockchain had subdued almost entirely from when the technology first entered the scene. Unlike other new technologies such as the cloud and AI, blockchain struggled to be validated or deployed at the same rate.
Over the last couple of years though, blockchain has slowly come into its own. In 2019, financial markets began to realise the possibilities of what the distributed ledger technology can do and started to identify its use points beyond just powering cryptocurrencies.
Blockchain start-ups were on the rise following an increase in new blockchain alliances, such as Enterprise Ethereum Alliance. New infrastructure projects were then introduced, and we began to see the development of real-life deployments and advances.
Advancements with blockchain technology has led to most analysts and commentators predicting a positive outlook in the adoption and adaptation of blockchain in an enterprise context. There has certainly been a rise in companies seizing a competitive edge to redesign and rearchitect blockchain to fulfil the necessary rigorous demands within the financial industry. These companies are now leading the way in showing the sector how the next generation of blockchain can be used intelligently for the new world we now live in.
R3 is a prime example of an enterprise software company that has designed and architected blockchain technologies to address real world problems. It is currently working with over 200 financial institutions, regulators, trade associations, professional services, and technology companies to develop a new blockchain platform called Corda. Corda is specifically designed so that businesses can deliver two interoperable and fully compatible distributions of the platform, addressing issues such as transactional certainty, data privacy, and limitations to scalability.
The new world
Once the reality of the global pandemic was realised by governments, strict lockdown measures were suddenly enforced, and we entered a new world order. An area of weakness that the outbreak of coronavirus particularly exposed was the global supply chain which was severely disrupted in the early weeks of quarantine.
However, the World Economic Forum stresses that this will be where the visibility, traceability, and interoperability of blockchain platforms will be critical in helping to stabilise the economy and fight against the virus. This is because of the use of cryptography in blockchain that creates an undisputable record of transactions and operations, hence eliminating the need for physical proof points and centralised validation. If more organisations were to leverage blockchain in this way, supply chains could be better managed and controlled remotely, and even tailored if necessary, to respond to any changing circumstances the pandemic may bring.
More and more, countries are realising that we need to come together if we are to overcome this virus and economic crisis, and the same can also be said for blockchain. Partnerships and collaboration are key, and application service providers and subscribers should work together with service and product providers at an operational level integration for that competitive advantage.
Real value can be seen with the integration and support from hyper-scale platform communities, for example Microsoft Azure and AWS, combined with open industries like IPC’s Connexus Hub, can create end-to-end solutions that will solve business problems.
There is also a shift towards application program interface (API) which support partner integration and allow institutions to easily access data, provide insights and encourage innovation for companies and the market needs. To support the operationalisation of blockchain in the systems-oriented context, service providers play a key part as they are natural connectors that embed connectivity to key market participants.
The world markets have experienced high volatility in recent months and some of the sharpest levels of contraction on record. It will be a long road ahead for financial recovery, but innovations in blockchain suggests that it might not be all doom and gloom.
Of course, blockchain is not a miracle technology that can rescue the world economy, but now is certainly the time for companies to invest in its operationalisation and deployment. The non-partisan nature of blockchain means users are able to act quickly with minimal cost and limited barriers for innovation which will be valuable components in healing an ailing global economy.
By Rob Coole, VP, Cloud Technologies, IPC
Rob joined IPC in 2013 as Senior Manager Product Management and is now the company’s VP of Cloud Technologies. Before coming over to IPC, Rob worked as Head of Global Solutions for Speakerbus Ltd and he spent over 10 years working at BT in various roles.