Blockchain Adoption

"The future is here and the blockchain and Smart Contracts are behind on us".

Information Technology (IT), innovation is rapidly reshaping and transforming organizations, affecting fundamental aspects of their everyday business activities and processes. These changes are coming with advantages and disadvantages as well as many challenges.

Cryptoassets are the novelty in the ecosystem right but what about the technology behind them, all the types of CryptoAssets make use of Distributed Ledger Technology (DLT) known as "Blockchain" act as decentralized systems for recording and documenting transactions that take place involving a particular digital asset also DLT encompasses the use of independent computers, often referred as nodes to record and synchronize and share individual transactions in their respective electronic ledgers.

Blockchain is an example of a DLT. Transactions can exclude the exchange of data (e.g., personal identification records, data recovery systems), Blockchain uses a digital ledger that allows for the brokering of trust on a decentralized peer-to-peer network.

While Bitcoin and other CryptoAssets grew intensely popular among the financial markets and investments world in late 2017 and early 2018 almost 4 years ago, they have since become more of a niche area for cryptocurrencies enthusiasts. However, blockchain technology remains is a quickly growing area of growth for companies specifically financial companies or companies across a host of industries. It is possible that blockchain technology will ultimately be seen as the most important innovation to come out of the cryptocurrency boom.

Blockchain provides adopters with advantages such as anonymity, immutability, transparency, security, and fast transactions, promises to disrupt business models, business plans, business procedures, and all the aspects of Society by creating information systems that are transparent and provide a single point of truth for all of the members of a network, as an electronic ledger with the properties of decentralization, immutability, cryptography, and security, DLT represents an innovation beyond the traditional database.

The main keys in Blockchain Technology

Blockchain is anticipated to be a core functional spanning multiple industries in the next twenty years. This blockchain has advantages and benefits which includes:

Anonymity

Anonymity is a key feature of his infrastructure which attracts individuals and organizations alike to implement it (Zyskind, Nathan and Pethland 2019, Harrigan 2020). Blockchains allow users to only be identified by public keys, an essential element of the blockchain system.

Immutability

Immutability is a. fundamental characteristic of blockchain and has been identified repeatedly as one of the reasons for its success thus far (Tapscott 2016). Changing one block in the chain would involve changing each subsequent block as, each block contains pieces of information of the previous block (S. Nakamoto 2018,).

Transparency

Blockchains can be categorized as being private or public. The Sole distinction between a private or public blockchain is that in a permissioned blockchain, access to a network is restricted (e.g., private equity platforms agreements) on the other side, public blockchains are a completely distributed ledger with all the users in the network being able to view all the transactions overall chain (S. Nakamoto 2018).

The fast growth of Blockchain

As can be seen in the figure below, the term "Blockchain" peaked in February 2021, this peak coincided with the increasing growth of bitcoin CryptoAsset. Blockchain is defined as an open-source dataset, distributed across millions of computers, utilizing cryptography. Ultimately, blockchain is a secure decentralized, public ledger, in which every person can view transaction history in totality, removing the need for a trusted third party, using bitcoin, for example, we will now provide an overview of how blockchain technology works.

Blockchain Use Cases

Smart Contracts

Smart contracts are being introduced in 1994 by Nick Szabo, however, it is one of the most deliberated uses of cryptography technology (Garrod, 2017). Smart Contracts are defined as computer programs that automatically execute the terms of a contract, or contract, or contracts that are executed when user interfaces are combined with computers protocols (Canseco, 2020) it is now believed that Zsabo´s creative idea of conducting contracts through a decentralized cryptosystem, it allows unknown and untrusted parties to transact securely, without the need of a third party acknowledges the potential of the application of blockchain technology, also is important to mention that a number of risks are involved with the uses of smart contracts, such as irrevocability of the terms programmed in them, lack of regulation, and the irrevocability of the transactions or agreements, in contrast, tho this the risk incurred by smart contracts are greatly reduced in comparison to traditional because they are autonomous, self-sufficient and decentralized (Ross, 2017).

Internet of Things

The utilization of blockchain technology involves the recent appear internet of things (IoT) in which all communications of smart devices are connected between them and the information is stored securely (GringBerg, 2011).

new smart products are showing that what began as an experiment is now globally recognized, blockchain enables IoT to transact and communicate in real-time, and with the rapid increase of "mobile wallets" payments can be paid via "SmartPhones" (Ross, 2017). With million perhaps in the next years trillions of devices that are connected and communicating with each other, it is not feasible for banks to process trillions of transactions in real-time, and blockchain will come in to play in these circumtances (Tappscot, et al., 2016).

Supply chain

Blockchain could be used in this instance as a transparent ledger that is available on each node and would create a formal log or tracking products in the supply chain (Pilkington 2019), through blockchain has Benn conceptualized by IBM, Walmart, also been implemented in the diamond industry with a Diamond coin (Abdullah 2021).

Political and voting system

The online voting systems will protect anonymity, and personal data information by employing blockchain into voting systems greater transparency would be in existence with each vote begin accurately recorded (Pilkintong 2016).

Micropayments & financial industry

The financial services industry is witnessing an increase in the number of cases for DLT adoption every day we believe that this can reduce bank's infrastructure costs because the practice has shown us the immense potential for financial entities, and another figure of the financial sector, it promises huge savings in infrastructure, transaction, and administrative cost.

Micropayments is defined as a very small payment, and in terms of CryptoAssets, specifically cryptocurrencies, this would be a Satoshi, it should be noted though that as the value of bitcoins increases, a satoshi may no longer be considered a micropayment and could potentially grow to be quiet a large payment (Schults 2021). The practical relevance of micropayments is supposed to substantially increase in the forthcoming years, with reference

Gaming Industry & DeFi

The use of blockchain is currently being incorporated into all internet browsers and websites by expert programmers also programmed in recent years, the gaming industry has gone one step further, using blockchain technology and the creation of digital tokens to monetize these games and for the gamers themselves to become investors. And this trend is only expected to rise in the DeFi projects that many of them are collateralized with Defi projects such as AXIE infinity, Decentralized finance is an emerging ecosystem of financial applications and protocols built on blockchain technology with programmable capabilities, such as Polkadot, Ethereum, and Solana about the future of Defi market the last year near of $1 billion worth of cryptocurrency deposited in DeFi applications. Today, DeFi market exceeds the $60 billion mark, and it peaked at over $86 billion this year (DeFi Pulse).

Conclusion

The rapid development of blockchain building upon the success of bitcoin has made it a promising and potentially disrupting technology in many areas.

There are many challenges specifically Institutional inertia and Regulatory Issues as a Lawyer I saw many problems despite the fact blockchain projects offer publishing solutions, based on open science principles no intermediaries especially in the financial sector, the success of these platforms such as Exchanges and DeFi projects has been limited so far, with less than a hundred papers and regulatory rules sometimes extra limited.

In 2017-2021 blockchain (and associated technologies, such as Smart Contracts) has been adopted in recent years in many areas such as financial, commerce, retail, supply, management, public administration, and healthcare that does it means the blockchain technology is the future perhaps no is the present and the future.

References:

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Abdullah Mohammed تطبيق Blockchain والتوقعات المستقبلية في الصناعة المصرفية, 2021 (189-236

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Ross E, S. (2018) nobody puts blockchain in the corner: The disruptive role of blockchain technology in the financial services industry and current regulatory issues., catholic university journal of law and technology 25 (2) 353 - 386.