The transformation of organizational processes meant for core business operations, like introduction of new services, could be challenging. While it is difficult to adapt to the concept of change in certain cases, many market forces drive enterprises towards transformation. Blockchain is one of the prominent technologies which has been a driving factor for business transformation in various sectors.
However, it is also reasonable to wonder about the impact of blockchain for business in different sectors. So, let us take a look at some of the top blockchain trends in 2021 and how they will influence businesses. In addition, the following discussion would also reflect on some of the examples of how to implement blockchain in business.
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Blockchain Trends to Look Out For In 2021
If you want to know how blockchain technology would change the way we do business, then it is important to reflect on current trends in the blockchain industry. An impression of the state of the global blockchain industry in 2021 could encourage many blockchain business ideas. Is it worth thinking of a business with blockchain technology? Let us take a look at some pointers to find answers.
The global blockchain market would grow considerably in the coming years. With accelerated demand for digital transformation, the use of blockchain for origination of new and enhanced business processes is increasing. Therefore, the global blockchain market could reach a value of almost $39.7 billion by the year 2025.
Blockchain Projects Will Go To Production
According to a survey by Gartner, almost 40% of the participants in the survey stated that they had at least one running blockchain pilot project. The predictions of Gartner also suggest that almost 30% of blockchain projects worldwide will go into production in 2021.
Banking and Financial Services Will Continue as Blockchain Favorites
Banking and financial services sector has been dominating blockchain adoption for quite a long time and will continue to do so. The decentralized nature of blockchain enhances the scope for blockchain business in the financial services sector. As a result, you can witness promising levels of growth in retailored financial services and contactless transactions.
Another prominent trend in the blockchain industry that could generate prolific blockchain business ideas refers to decentralized finance. Decentralized finance or DeFi is basically the concept of decentralized ledger technology to drive financial inclusion by leveraging smart contracts.
Zero Knowledge Proofs
Blockchain is inherently favored for its cryptographic benefits. It is difficult to modify information in the blocks on a blockchain due to the cryptographic hash connecting one block to its previous block. Decoding the cryptographic hash function for unraveling the previous block is quite a humongous task.
Imagine having to decode innumerable hash functions to unlock information from a blockchain. Now, blockchain trends have turned the focus towards Zero Knowledge Proofs of ZKPs as a trustworthy cryptographic mechanism. The introduction of ZKP-enabled decentralized apps will have a profound influence on the use of blockchain for business in 2021.
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Influence of Blockchain on Various Industries
Now that you know the capabilities of blockchain to change the way businesses operate, it is important to reflect on industries affected by blockchain. Many people are eager to know ‘how blockchain is used in business?’ and a clear impression of examples of blockchain applications in different industries can help in finding the answer. Over the course of time, blockchain has been adopted across various industries with promising outcomes. Here is an outline of the different blockchain business ideas which have been transforming notable industries.
The opportunities for blockchain-based businesses in the financial services sector are quite promising. Blockchain and banking have been going hand in hand for quite a long time. Blockchain could offer the same function as banks by offering digital, secure, and immutable ledgers.
As a result, blockchain improves accuracy and flexibility for information sharing in the financial services ecosystem. Blockchain has the potential for disrupting the banking industry valued at over $5 trillion through disintermediation of key services offered by banks, ranging from clearance and settlement systems to payments.
The most notable example of the influence of blockchain in the banking sector is evident in the case of Credit Suisse. It entered into a collaboration with New York-based startup Paxos for using blockchain technology in settlement of US stock trades. In addition, notable names in the financial services ecosystem have also shown promising examples of how to implement blockchain in business. For example, JPMorgan Chase ventured into the domain of blockchain with JPM Coin as a means for ensuring transactions among institutional accounts.
Borrowing and Lending
Traditional banks and lending institutions generally provide underwriting for loans on the basis of credit reporting. The centralized system of credit reporting can turn hostile for customers. Therefore, alternative systems leveraging blockchain for origination of cost-effective, secure, and efficient mechanisms for lending and borrowing can simplify the process considerably. The cryptographic security and decentralized database for previous payments could enable customers to apply for loans according to a single, global credit score.
One of the notable examples of the application of blockchain in lending and borrowing using cases refers to Dharma Labs. It is basically a protocol for enabling developers with tools and standards required for developing online debt marketplaces.
Another example of a blockchain-based technology influencing the domain of lending and borrowing refers to Bloom. It is a project focused on introducing credit scoring in blockchain with emphasis on development of a protocol for management of risk, identity, and credit scoring by leveraging blockchain technology.
Big hotel chains often lose 10% to 15% of total revenue in commissions to third-party booking services. However, blockchain business ideas in hospitality can help in removing intermediaries and ensuring that revenue reaches organizations directly. Small and medium-sized businesses in hospitality sector could find a subtle boost in direct provider-to-consumer interaction while reducing costs.
One of the prominent examples of the application of blockchain-based business ideas in the hospitality sector is Winding Tree. The blockchain-based platform offers a decentralized, open-source B2B travel marketplace in collaboration with tourism offices, hotels, and airlines. Winding Tree has successfully collaborated with Air Canada, Lufthansa, Air France, and Etihad Airways.
What Does Blockchain Mean for Business Owners in 2021?
The impact of blockchain trends in 2021, alongside the potential of blockchain for ensuring value in use cases across different industries, could encourage any individual to start their own blockchain-based venture. However, it is important to look out for pointers on adapting effectively to the wave of ‘blockchain change.’ With many industries encountering disruption with blockchain business, executives need to reflect on the following pointers.
Blockchain Transforms Complete Business Ecosystems
Blockchain has shown explicit potential for transformation of complete business ecosystems. Therefore, it is important to look at the long-term picture with blockchain digital transformation. Rather than aiming at short-term improvements in specific operations, tasks, or processes, business leaders must have a clear vision of transforming other facets related to their business with blockchain technology.
Blockchain Success Relies on Collaboration
The next important pointer for enterprise leaders looking for answers on ‘How is blockchain used in business?’ is collaboration. The combination of complementary capabilities from different organizations could help in saving time as well as other resources. With the help of blockchain, enterprises could share information with each other and learn about the different ways of using blockchain. Collaboration on industry level could also help enterprise leaders discover opportunities for reducing risks of innovation.
Capitalize on Social Purpose
New business setups based on blockchain should capitalize on the identity of social purpose as a significant agent of change. The modern generation of customers is changing the ways in which companies create and deliver value. Therefore, blockchain business ideas in 2021 should emphasize sustainability and other market forces favored by modern customers.
Internal Communication and Leadership is Essential
The success of blockchain-based business ideas in 2021 would depend a lot on collaboration. However, it is important to focus on the value of internal collaboration as a prominent tool for driving better momentum for innovation. Leaders have to take responsibility for recognizing potential members at each level and enable better prospects for engaging them with the transformation journey. Team members should have the capability for self-electing in the case of strategic change projects for achieving desired performance from them as a team.
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You can clearly notice the various ways in which the applications of blockchain for business can transform different sectors. The new trends of blockchain in 2021 substantial showcase focus on accelerated pace of digital transformation, financial inclusiveness, and improved security. Many notable enterprise players are joining the blockchain trend, and this has been a prolific source of inspiration for blockchain-based startups.
The clear understanding of blockchain trends and the ways it affects certain conventional industries can guide aspiring blockchain startups. Most important of all, the pointers for understanding the domain of blockchain and adapting effectively to its changes are crucial for leaders.
There is no doubt that blockchain is a futuristic technology and will continue to dominate the world of business in the coming years. However, it is important to understand how blockchain changes the way we do business to develop credible business ideas. Learn more about the fundamentals of blockchain and find valuable insights on building your own blockchain-based business.
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The post How Will Blockchain Change the Way We Do Business in 2021? appeared first on 101 Blockchains.
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