LKS Foundation

Science & Technology

The blockchain market: what are the advantages associated with its use?

2020-05-27 13:09:00

Let’s dive into the features of blockchain that make it so irresistible for business

Blockchain technology has been around for more than 10 years since its inception. Its application in various economic and social fields has become more widespread, opening the doors to new scenarios of greater efficiency and safety.

Meanwhile, the fuzzy exchange of information and data brought about by the invention of the internet is gradually developing into a system able to transfer value in a secure and traceable way. In this regard, what makes the blockchain an extremely reliable and efficient technology is that it is a shared registry set to create unique and non-duplicable assets while guaranteeing and certifying the complete history of all data and transactions.

Trust and decentralized control

The birth of bitcoin has meant not only the creation of the first reliable digital currency, but also the establishment of an architecture based on trust and automation.

The internet has been the great catalyst for information, whereas the blockchain technology represents the same for trust. The latter allows you to trust its output because it contains data which is shared, accessible and distributed by all network participants in an unchanging, transparent and secure way, without the need for a central administration body.

This is one of the main reasons why the blockchain is of interest in many economic sectors: The lack of trust increases the costs of each transaction because in order to compensate it you need to acquire more information and carry out monitoring and controlling activities.

The advantages of the blockchain for business

The elements that make this technology particularly interesting for business are:

  • Digital totality: In the blockchain everything becomes digital and the transactions inside it can concern any type of asset and information such as money, contracts and documents, along with others.

  • Security: Thanks to encryption, it is not possible to make any changes to the blocks that make up the chain. In this way the data saved here cannot be manipulated and are therefore reliable and secure.

  • Reliability: The blockchain is resistant to any data loss or damage. Even if there is one damaged node, the others continue to operate keeping the chain stable and without any data loss.

  • Accountability: The blocks are added to the chain in a precise, unchangeable and chronological order. This can, for instance, prevent disputes about the execution of the different phases of a contract.

  • Velocity: The blockchain does not require a central body that verifies the validity and consistency of the information, in this way the time required for checks is eliminated.

Growth prospects

According to the 2019 data of the Blockchain & Distributed Ledger Observatory of the School of Management of the Politecnico di Milano, 59% of Italian companies have started projects related to the use of blockchain technology or were about to do so: 3% had ongoing operational projects, 35% had already started experimentations and 21% intended to take action in the near future. 

All this resulted in an expenditure in Italy in blockchain and Distributed Ledger technologies of around 15 million euros, which places our country among those with the greatest commitment in this field and precisely in third place in Europe after the United Kingdom and Germany.

At a global scale, statistics on blockchain adoption show that only 0.5% of the human population, around 40 million people, is currently using blockchain technology. 

However, according to even the most conservative estimates, this number is expected to quadruple in 5 years, and by 2030, blockchain technology is expected to affect 80% of the world's population.

With every major industry investing in blockchain technologies, current estimates show that the business value add of blockchain will be worth more than 360 billion dollars, in just 8 years from now. By the year 2030, the business value is projected to go over the 3 trillion dollar mark, setting blockchain to be one of the fastest growing industries. 

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