What comes first about Blockchain Opportunity or threat?
Blockchain as a clear opportunity for businesses that are trying to improve transparency and eliminate middlemen, or intermediaries and for clients who benefit from these services., that is exactly what Blockchain represents.
Blockchain technology threatens incumbents by way of creating countless opportunities for disruption, it actually pervasive among all industries.
The middlemen are at the receiving end and the threat is primarily for them as their utility is replaced by Blockchain. The opportunity in Blockchain presents itself first to the consumers and innovators. The middlemen / the intermediaries will then later begin to feel the impact of the new technology and they begin to feel threatened about their businesses and investments.
Opportunity to innovators and consumers
Middlemen begins to feel threatened after their thriving businesses, now the new technology has come to threaten on their livelihood. The intermediaries and their businesses faces threat.
Though the incumbents really feel threatened but Blockchain benefits the majority. The consumers benefits from the transparency, fast and cheaper transactions without the interruption of the middlemen or any intermediaries.
It’s a classic case of technological disruption, like how ride hailing is replacing taxis or booking sites replaced.
Every opportunity is a threat to someone when it has to do with distruptive technologies.The tremendous opportunity associated with Cryptocurrency in general, has great opportunities and benefits to consumers and Bitcoin in particular, is the disruption of traditional banking by innovative, decentralized networks performing similar functions at a cheap rate and faster too. From every indication Bitcoin is a decentralized
networks that can maintain public ledgers with good security, privacy, transparency and
usability features for a very small fraction of the cost of traditional banking.
Four key advantages of Blockchain technology
1, Blockchain as a trusted network which offers a secured digital infrastructure for identity verification.
2. The technology is programmed in a way to make sure people do not harm any one through its supervisory network.
3. Blockchain is a delivery network, it promotes transparency in transactions as well as enables faster and cheaper international payments, and also makes the disbursement of funds more natural and easier.
4. It provides incentives for crowd-based collaboration. Its a collaboration network
Innovators and consumers are already seeing huge benefits from blockchain technology around the world. Although the US dollar is stable and our banking system is reliable, in countries like Zimbabwe, Venezuela, and Afghanistan, people are already able to put aside corrupt regimes and unstable currencies by using cryptocurrency.
This is a right move as change starts there, the benefits spreading everywhere. A more reliable, cheap digital payments, with speed and transparency that work anywhere in the world is already an incredible innovation. A peer to peer fraud free transaction without intermediaries is the ultimate.
Threat to incumbents / aftermath of the threat
Legacy Companies, their business models and pattern
and their control of present economies sees Blockchain technology as a threat to their investment.
They are trying to integrate functions of blockchain to eliminate threats from blockchain by avoiding disruption and disintermediation in an attempt to stay relevant.
For instance, some private own blockchain has come up to combat this threat.
JP Morgan has been building their own private blockchain known as Quorum since 2016, which is a pure replica or should one say a photocopy of Public Ethereum Blockchain. Just recently announced was the launch of their JPM Coin which will be transacted on Quorum. So many banks have signed Letters of Intent to use the JPM Coin.
Participants or clients in this system can transact anytime and any day with immediate settlement while incurring only some fractional fees through the JPM Coin. JP Morgan is well aware that the days of charging for payments are over. This pattern has been distrupted by blockchain technology
Therefore, they are doing the next best thing and that is taking what the market has to offer because they are well aware that there is no more transaction charges .
In other to control the transition to Blockchain they brought in Banks and customers to on their blockchain platform, though they may not make money on transfer charges but they intend to retain their customer base while soliciting for other financial services such as account management and lending .
Another example is Central Banks who is also integrating a digital coin for transaction settlement . The use of blockchain is quick, less prone to error transparent and cheap. Performing a transaction from a large US Bank to a small international bank is slow, costly, and error prone – many times your money can get lost and take several days to recover.
Because of the anonymity and the decentralised nature of cryptocurrency ,Companies and Central Banks are presently adopting digital currencies rather than cryptocurrencies. The main differences are cryptocurrencies provide anonymity and are usually decentralized (Bitcoin, Ethereum, litecoin) whereas digital currencies which Central Banks and Legacy
Companies prefer are controlled on their central servers and do not provide anonymity.
These digital currencies are equally less volatile and will be backed by dollars, treasuries, or another sovereign nation’s currency. All cryptocurrencies are technically digital currency but not all digital currency is cryptocurrency and as such does not possess the models and the attributes of cryptocurrency . Digital Currency is very different from Cryptocurrency.
We believe that we are in an era of technological disruption, which is a threat to all incumbents. It quite unfortunate that they are not maintaining the true value of distributed ledger is the main vision of Blockchain technology. Everything needs to be open and decentralised and not closed and centralised blockchain network. They are afraid of disintermediation because of the countless possibilities of these technologies.
Intermediaries shouldn’t come in another form or pattern , otherwise the key aspects of blockchain will be defeated and its benefit to consumers will be ruled out. Private blockchain networks disguising under real blockchain technology but neglecting the models of the network is no longer beneficail. To truly capture the value of blockchain technology these systems need to be opened up and become more decentralized. This will be the opportunity of the future.
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