It is difficult to imagine a pre-digital world. E-commerce, online banking, using online tools to make doctor’s appointments, and find out test results: Technology is embedded in our daily lives, offering enormous advantages to daily living -- and the broader economy.
Yet digital technology comes with a downside. News headlines about hackers accessing personal data are disturbingly common. Far too many of us have received an email from a company we’ve engaged with that it has been hacked and our individual information is at risk. That is why protecting sensitive data and digital identity information has emerged as one of the great challenges of the modern technological age.
The good news is a possible solution to these challenges is emerging: blockchain.
The Coming Regime Shift?
Blockchain is a data storage system that records transactions and tracks assets in a business network. It derives its name from the way it stores transaction data – in blocks that are linked together to form a chain. As the number of transactions grow, so does the blockchain, which records the time and sequence of transactions. These are then logged into a secure network.
Benefits of blockchain include enhanced security because data is encrypted and can’t be altered, greater transparency because all participants with access can see all the data at the same time, and the ability to trace transactions as a result of that transparency. The result is greater efficiency for businesses and a significant economic impact, which is predicted to reach $176 billion by 2024 and $3.1
trillion by 2030.1
Of course, upon hearing the word “blockchain” digital currencies often come to mind. But blockchain technology offers enormous potential for a range of other uses across many industries. It can be used to strengthen cybersecurity, help protect digital identities and data, and increase business efficiency.
We see this particularly in three main areas:
Supply Chain Management
The Covid epidemic demonstrated the frailty of the supply chain with the disruption of the production and delivery of a range of items. Expectations of overnight or same day delivery were upended. Businesses were throttled by inefficiencies of what they once thought were robust supply chains.
Businesses have taken these lessons to heart and worked to improve supply chains, often utilizing blockchain technology to increase end-to-end transparency, build resilience, streamline processes, and, ultimately, improve efficiency -- and most importantly, increase customer satisfaction.
Familiar names such as IBM, Oracle, and Walmart have embraced blockchain technology to optimize supply chain management by tracking goods and automating transactions.2
Digital Payments
Financial institutions are utilizing blockchain to make paying online safer and reduce the chance of cyber-attacks or fraud. Blockchain can also improve speed and efficiency of commercial transactions, particularly international ones, and can reduce the high costs and overhead involved in digital commerce. Increased transparency from blockchain can also help strengthen audibility and regulatory compliance. Again, resulting in greater resilience, security and efficiency.
In addition to Coinbase, Visa, Mastercard, and PayPal use blockchain to assist in their digital payment systems.3
Healthcare.
Worldwide spending on blockchain in healthcare solutions is expected to grow to $750 billion by 2033, a CAGR of 69.2% from 2023-2033.4
Concerns about the privacy of medical information are top of mind for patients and individuals at a time when more and more of the healthcare process is online. Meanwhile, data breaches have unnerved patients as they have continued to steadily rise over the past decade. In 2023 alone 725 data breaches of 500 or more records occurred.5 The largest data breach of the year affected 11,270,000 individuals, the second-largest healthcare data breach of all time. Blockchain can be a potentially powerful tool to help improve data security against such attacks, while facilitating the sharing of records between providers and insurers.
In addition to clinical data exchange, blockchain is currently used in other healthcare applications including claims and billing, clinical trials, and supply chains. Well-known companies such as Accenture and IBM are already utilizing blockchain to assist in healthcare systems.6
A paradox of our age may be that although technology creates challenges, it can also create solutions. Globally, 76% of decision-makers plan on investing in blockchain solutions in 2024.7 We are still in the early days of blockchain technology, buts its potential benefits are enormous, and it has caught the attention of decision-makers worldwide as a potential solution to digital data protection and transfer.
1Digital Disruption Profile: Blockchain’s Radical Promise Spans Business and Society (gartner.com).
2 Amplify ETF's BLOK Fund is comprised of 2.38% of IBM, 1.40% of Oracle, and 0.99% of Walmart as of 03/01/2024.
3 Amplify ETF's BLOK Fund is comprised of 4.80% of Coinbase, 2.42% of PayPal, 1.24% of Mastercard, and 1.06% of Visa as of 03/01/2024.
4 https://market.us/report/blockchain-technology-in-healthcare-market/
5 Healthcare Data Breach Statistics (hipaajournal.com)
6 Amplify ETF's BLOK Fund is comprised of 2.38% of IBM and 2.25% of Accenture as of 03/01/2024.
7Casper-Labs-Exploring-Convergence-Between-Blockchain-AI-Report-PDF.pf (casperlabs.io)