Blockchain technology is changing processes and ways of storing values and information. Although its penetration is undeniable, traditional companies require greater transformation to rollout blockchain. According to Gartner, by 2023, only 10% of traditional companies will achieve a radical transformation by using these technologies.
To gain a greater insight into this process and its adaptation to business, Andrei Boar, a lecturer at the Universitat Pompeu Fabra, headed a conference entitled “Key impacts of blockchain technology on the financial and business sector” at EAE’s Barcelona Campus. “Blockchain has evolved in response to the considerably high expenses involved in financial transactions, with a view to improving the current system”, explained Andrei Boar.
In his opinion, it is an accounting system or database with the power to record any information through the Internet. As such, it enables the creation of a distributed database in which “we all own part of the information”. This makes it a public and transparent system that cannot be deleted, modified or falsified.
With respect to cryptocurrencies, in his presentation, the lecturer stated that there has been a 50% reduction in such systems compared to last year. He explained that, with respect to the use of cryptocurrencies, it is important to highlight the benefit of direct payment and the fact that payment can be made from anywhere in the world. “However, one drawback, particularly in the case of bitcoin, is that it requires 10 minutes to validate the payment”, explained the expert, although there are more kinds of coins within blockchain, such as Ripple, which enables payments in 4 seconds, according to Andrei Boar.
He went on to debunk some of the myths surrounding blockchain, such as the claim that it is anonymous. “That is not true. It is a pseudo-anonymous system, in which everyone has a code to enter the system and access the information”. Moreover, he added that it is a hackable system, “that can’t really be touched”.
Andrei also discussed ICOs and business financing. “This is a new method designed to finance the creation of cryptocurrencies, on the one hand, and a blockchain-based project, on the other”. However, he added that one of the main problems is the lack of regulation. This whole financing system is a little riskier but, at the same time, more profitable. “As there are high energy and development costs involved, it needs capital”.
Another feature of this technology is smart contracts. “These are agreements between the different parties who agree to undertake actions in return for some consideration. It is always a matter of voluntary compliance”, explained Andrei Boar. Through blockchain, information is transmitted online and the contract is automatically executed when the condition has been fulfilled. “Therefore, it is fast, direct and economical”. Its primary use is in the commercial sector and the insurance market.
To conclude, the lecturer emphasized that blockchain is a system that enables time savings, speed, financing opportunities and cost savings, making it a system with a big future.