Introduction
Much has been made of the potential of bitcoin, the currency, but the venture capital community is increasingly focusing on the commercial potential of the underlying blockchain technology. Perhaps more interestingly, executives at large and sophisticated incumbent financial institutions and financial technology companies that I have spoken to, by and large, do not dismiss the technology. They believe it has legs and are studying the technology with a goal to enhance their product offerings. In short, many incumbents have a blockchain strategy. The general spirit is that the blockchain is like the Internet; sure, some businesses were disrupted and rendered obsolete, but the Internet made most financial services and other industry products better.
While many questions remain, the blockchain’s core features – decentralization, speed, low take rates, and stability (i.e. hard to hack) – allow it the potential to reinvent many industries. Beyond banking and payments processing, there are fascinating commercial applications to capital markets, insurance, legal technology, advertising, and government, among others. In each industry, there is the potential for significant efficiency gains (i.e. current functionality delivered faster and more cheaply) but also disruption. What follows in this piece is a synthesis, in simple language, of some of the most exciting commercial applications of blockchain technology we may see across these major industries in the future. Continue reading
