Global firms are catching on fast to the potent capabilities of blockchain technology and they’re suddenly in a rush to make amends for their initial scepticism. But who is set to prosper the most and which industries could be turned upside down as they now jostle for their piece of the crypto pie?
Among the many household names to have openly declared their new-found love of all things crypto in recent months are Samsung, Toyota and Deloitte. It’s telling that they all made a big media splash of this too, with press releases and media fanfares aplenty. There are no hushed corridor conversations about crypto in these companies any more – they want to shout from the rooftops their adoration for blockchain development.
All three have signed up to the Enterprise Ethereum Alliance (EEA), a relatively new group set up to connect corporate businesses, academics and tech vendors with Ethereum subject matter experts. Its list of 30 founding members includes yet more major brands eager to embrace the revolution – Microsoft, Intel, JP Morgan and Accenture. The EEA is growing as big companies realise they simply cannot afford to be left behind. There’s a heady mix of fear and excitement in the bluechip boardrooms.
Meanwhile, the job market is shape-shifting in a similar way. The number of blockchain engineer roles advertised on LinkedIn has trebled this year. It seems everyone wants a blockchain team. But demand is far out-stripping supply and many of these roles are staying vacant for a significant period of time. The education sector is gradually acknowledging the need to plug this skills gap. The University of Edinburgh has now launched Europe’s first dedicated course on blockchain and there are already similar programmes at Stanford, MIT and Berkeley in the US.
So the understanding is growing. And the demand and appetite for understanding are clearly already there – in bucketloads! But some firms will benefit more than others by being a frontrunner in the development race. And some could be at risk of going under completely if they drag their heels and slip to the back.
Any company that generates significant revenues from micropayments is going to be at the sharp end of this new era.
Credit card transaction fees can be around $0.30, sometimes with an additional percentage charge on top. On small item purchases like a $1 digital product, that’s a huge proportion of the total cost. But with bitcoin, the transaction fee can be determined by the payer and related to the speed of payment. Big online retailers like Amazon may benefit enormously by moving away from the mandated fees of Visa and Mastercard.
Similarly, any businesses that revolve around wire transfers are set for considerable change, as digital currency payments cut out the lengthy, costly process of such transfers.
The advancement of blockchain will also facilitate e-commerce businesses looking to expand globally and do so quickly into opportune new territories. The many cumbersome rules, regulations and checks that are currently adhered to in a standard international purchase are reduced massively in a fully-fledged bitcoin environment.
We’re not there yet though, of course. The current price volatility of bitcoin presents new challenges for online retailers who operate by setting their prices and generally keeping them fixed for a number of days, weeks or months.
The path to evolution will not be determined exclusively by commerce either. Governments and regulators will have a big say in all of this. Take Japan, for example. Many Japanese firms have seen their stock prices rise rapidly in the first half of 2017 after they passed a law to legalise Bitcoin as a form of payment – since when retailers have commonly started accepting it as one of their payment mechanisms. In global terms, this can help put the bigger online retail firms in Japan on the front foot, and ahead of international competition.
Finally, while we’re focused on the gargantuan collective muscle of the FTSE 100, the S&P 500 and so on, we should remember that this technology is advancing quickly. That means a number of small and brilliant businesses, yet to fully emerge, are likely to enjoy stratospheric success from their ability to move fast and their unwavering devotion to blockchain solutions since birth.
In the same vein, there could be exciting new opportunities for emerging market businesses to take on the giants of the developed western economies because they are less restricted by transfer fees and third party intermediaries in an advanced cryptocurrency universe.
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