Moving beyond the hype and debunking controversies, the report offers an in-depth and practical understanding of blockchain and its possible applications.
The report identifies ongoing and upcoming transformations, and sets out an anticipatory approach for applying blockchain technology in finance, industry, trade and public sectors.
There is space beyond cryptocurrencies and financial applications
Cryptocurrencies and digital tokens have been capturing most of the attention when it comes to blockchain's applications. But it also has potential in many other sectors, such as trade and supply chains, manufacturing, energy, creative industries, healthcare, and government, public and third sectors. Some features of blockchain technology that can be applied in these sectors include:
What is recorded on a blockchain stays as a single record, agreed and shared by all. A manufacturer can make a "digital twin" of a product on a blockchain to record its full history. This enables the tracking and tracing of how a product is built, stored, inspected and transported throughout its whole value chain. It can provide proof of ownership rights, helping to prevent unauthorised use, theft and infringements.
Blockchain enables smart contracts that could help to manage supply-and-demand flows of available energy. Working together with other technologies, like smart meters or sensors, smart contracts could automatically check prices and execute buy and sell orders. For a local producer of renewable energy, this could mean that they can trade energy with others in their communities more quickly and effectively. In the future this could support the development of peer-to-peer and energy communities.
It can be easy for everyone to check available data on a blockchain in a secure and transparent way. When checking public benefits like pension rights, a citizen could access their complete funds and contributions along his or her life. A tax authority could also have access to this information for every citizen, which can reduce processing time and administrative costs for all involved.
A global ecosystem is on the rise from start-ups to capital investment
We can see the rise of blockchain technology both in the sharp growth in blockchain start-ups and by the volume of their funding. International players in the United States are taking the lead, followed by China and the European Union.
Funding reached over EUR 7.4 billion in 2018 due to the explosion of venture capital investments and 'initial coin offerings'.
Blockchain does not follow a "one-size-fits-all" model
The potential opportunities and challenges of deploying blockchain technology are strongly related to context, application or sectorial issues.
That is why organisations should not develop solutions looking for problems, but find existing or foreseeable problems in their operations or business, and then look for possible blockchain solutions.
Bottlenecks and complex challenges lie ahead
Blockchain technology is still at the embryonic stage and facing many challenges, such as performance and scalability, energy consumption, data privacy, integration with legacy infrastructures, or interoperability between different blockchains.
Still based on a limited set of proven use cases, blockchain often entails additional risks and barriers for firms, businesses and organisations piloting it or interested in its deployment.
© European Parliament
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