Matthew Doull – Managing Director, TMT Investment Banking says, “Blockchains are the part of the Internet that you can’t cut and paste or erase. They make it possible for shared virtual spaces to be persistent and for the creation of truly valuable digital assets.”
Blockchain is a distributed digital ledger that can be used to store a variety of data and information. A blockchain allows data to be stored and distributed, but not duplicated. This is why a blockchain network is used with cryptocurrencies and with NFTs.
A blockchain network is a totally decentralized, secure database. It is a secure, digital record of transactions for cryptocurrencies, NFT ownership and DeFi (Decentralized Finance) smart contracts for crypto and other types of transactions.
Blockchain has many other potential applications including a secure way to transmit documents such as contracts. Many think blockchain and its potential are just in the infancy stage. The metaverse and web 3.0 will rely on blockchain technology to a great extent.
Current blockchain applications
Probably the most well-known current use of blockchain technology is in connection with crypto and with NFTs. Blockchain provides a reliable, ongoing digital record of transactions and ownership in these areas. As the use of crypto commerce becomes more widespread, an accurate record of ownership and transactions will become increasingly important.
Blockchain is emerging as a tool in the food industry supply chain. Blockchain has potential to help in a number of areas including:
- Improving the traceability of food sources, a factor in ensuring food safety.
- Helping grocers and others in their supplier selection process.
- Providing greater pricing transparency throughout the supply chain.
- Verifying ingredients used in producing certain foods and food items.
A number of major players in the industry use blockchain technology, including Walmart, Kroger, Kraft Heinz and Nestle. This number is expected to grow exponentially over the next few years.
Blockchain has many applications in healthcare, not the least of which is improving the ability to share and transmit sensitive patient data in a secure way. By some estimates, the use of blockchain in healthcare could save providers $100 billion annually in costs related to IT, operations and patient data breaches.
Pros and cons of blockchain
Blockchain has a number of pros and cons, here are a few.
- Transaction speed and 24/7 access.
- Security as blockchain is a distributed ledger that creates multiple database copies across a wide network.
- There are no third parties or intermediaries involved in the process.
- Data is not invulnerable to attack; technology continues to evolve for those looking to breach this data as well.
- Blockchain and related technology uses a lot of electricity which could be harmful to the environment.
- The lack of a central intermediary for blockchain data makes account recovery difficult, if not impossible if a user loses their key.
Future applications of blockchain
Many say that the sky’s the limit in terms of future blockchain applications. Here are a few examples.
Web 3.0 is the next iteration of the internet. It will leverage machine learning, artificial intelligence and blockchain technology to create more connected, intelligent and open websites. Web 3.0 is still evolving but many major tech giants are actively engaged in exploring applications and technology for this next iteration of the web.
Many believe that the introduction of web 3.0 and the continued use and development of blockchain technology could help facilitate the widespread adoption of crypto as an accepted form of payment. We’ve seen a few big companies begin to accept crypto as payment and this is predicted by many experts as a wave of the future.
Many industry experts are looking to blockchain to largely replace the need for passwords and as a way to enhance user authentication on the web. This could have huge implications for not only individual users, but across countless industries that rely on a secure network.
The nature of blockchain will lend itself to many applications in our daily life including playing a role in real estate transactions, voting records, and healthcare just to name a few.
While the widespread use of blockchain technology could have a favorable impact on many industries and individuals, those who lack access to basic technology may find themselves even further behind.
To learn more about the impact of blockchain on your investments, please contact your Wedbush Securities to discuss how blockchain could have an impact on your portfolio.
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