Blockchain evolved from Bitcoin, a form of digital currency also known as crypto-currency, which is independent, decentralised, commands low transaction fees and is practically invulnerable to fraud or theft. Blockchain is a technology that keeps a digital record of transactions that are enforced by sophisticated cryptography and validated by a network of communicating computer nodes through a shared registry. Thus, this technology eliminates the need for third party institutions to validate transactions.
Australia’s inaugural event, Blockchain Summit 2016 will address some of the most critical challenges and opportunities in the emerging blockchain industry. Download the agenda here. The event will feature over 30 thought leaders, including international experts from the US, Germany, United Kingdom, Japan and China. Some of the key themes to be addressed will include information security, the implementation of blockchain in the business environment, regulation and compliance and the challenges faced in adapting to technological change.
Some of the main benefits of using blockchain technology include:
- Permanent and unalterable records, requiring validation from every client node in the network
- Encrypted, secure and transparent information
- Universal digital identity leading towards increased efficiency
- Almost instantaneous settlement without the need for a third party intermediary, leading to operational cost savings
How will blockchain impact the Australian business environment?
Blockchain technology has the potential to radically change the business environment both worldwide and in Australia. For instance, Microsoft partnered with both ConsenSys and R3 (a consortium of some of the world’s largest banking institutions, including Commonwealth Bank of Australia, National Australia Bank and Westpac) to offer a cloud-based blockchain as a service (BaaS). Institutions that are part of the consortium gain access to Microsoft’s platform, which can potentially speed up the creation of blockchain products to be used in the market.
Australian consumers readily accept new technologies, which is the ideal environment in which blockchain technology might operate. Locally, the Australian Securities Exchange (ASX) holds a 5% equity interest in US-based firm Digital Asset, which is currently working in the development of a private blockchain that will allow almost real-time settlement of trades. The use of blockchain in this process is expected to eliminate layers of inefficiencies, whilst providing substantial cost reductions for clearing and settlement services. Furthermore, in March 2016, the government-owned Australia Post also announced that they will be looking into the possibility of integrating blockchain technology as part of a digital identification service. These developments are setting a pathway for further expansion and progression in integrating blockchain into daily lives, which one can expect to continue as the technology further advances.
Potential uses of blockchain
Some of other possible uses of blockchain technology include:
- Registering and tracking the ownership of individual precious metals, diamonds or luxury goods
- Near instantaneous settlement of complex processes such as stock trading, tax collection or inter-country transactions, all with low operational costs
- The sharing of information between various sharing platforms such as Airbnb, Airtasker or Uber
- Micro-payments, such as charging to read per article in an online magazine/newspaper instead of a monthly subscription
- Better integration of Internet of Things (IoT) applications by facilitating transaction and harmonisation and communication between devices
- Enhanced universal loyalty points programmes across various franchised operations
Potential hurdles of blockchain
Blockchain continues to be challenged by increasing levels of regulation, concerns over information security and, most importantly, the difficulty in achieving collaboration between the networks of participants. Each organisation has their unique business structure and expectations for the usage of blockchain. Many questions and rules need to be answered and agreed, including the management of the amount of information to be shared for verification purposes between the organisations in the network, whilst still keeping the contents of transactions private and secure.
Nevertheless, the implementation of blockchain technology is set to significantly alter the financial landscape both in Australia and worldwide, by improving efficiency and effectiveness through new revolutionary products, services and business models. Blockchain technology is still in its infancy but it has the potential to disrupt the market in Australia.
Blockchain Summit 2016
In this upcoming event, Euromonitor International will have the opportunity to further understand blockchain, including the current status of regulations in Australia, the stance taken by banks towards this technology and, most importantly, how consumers will benefit.
To find out more about Australia’s first Blockchain Summit taking place 28-30 June at the Royce Hotel Melbourne, download the agenda here or visit the website. To register and save up to 10% off the cost of attending, quote Euromonitor10% when registering through email: firstname.lastname@example.org or by calling: +61-2-9229-1000.