Here are three ways blockchain can change society

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BITCOIN

Blockchain was first introduced as the backbone for the Bitcoin cryptocurrency, which was mainly designed to be a means of payment. Since then, technology has developed to unprecedented highs. In 2021, we have thousands of different cryptocurrencies, and most of them represent increased capabilities in the digital space.

With the inception of smart contracts, the blockchain protocol became suitable for a variety of different tasks. Essentially, blockchain itself has become a decentralized ledger that could be implemented in any industry or even across multiple industries. This functionality opens up a whole new range of opportunities both for businesses and individuals.

Inevitably, the reorganization of financial systems, which supposedly will be facilitated by blockchains’ wide adoption, is going to affect society at large. If we change how we interact with each other daily on financial matters, official documentation, or even internet chatting, this might bring about changes in our social groups’ functioning as well. Let’s explore how blockchain can change society and what we can do about it.

#1. Trustless society

Right now, we still depend much on intermediaries when it comes to financial services. You cannot send the money to your friend directly. Instead, you give your money to the bank which then transfers this amount to the receiver’s bank account. And then, your friend has to use their bank’s services or another intermediary like an ATM in order to get the money that you’ve sent. Similarly when you pay for products and services.

The payments are processed with Visa and Mastercard, money is sent and received by banks, electronic payments are handled by companies that own the mobile applications and possess your personal and financial data.

During the financial crisis of 2008, a lot of banks in the USA had to shut down. Numerous financial institutions like brokerage firms were filing for bankruptcy. Although the government managed to bail out some of those companies, it was not a guarantee that retail clients would still own the funds on their savings accounts or the houses that they bought through a mortgage. So Bitcoin’s concept of a p2p global network of exchanging the monetary value appeared just in time.

This concept took time to process in our minds and now becomes more and more popular. According to experts, cryptocurrencies might revolutionize how the global financial system works. Soon we might face a future where we won’t have to depend on intermediaries to keep our money in their companies.

#2. Renewing the old systems

While the businesses strive to expand their operation onto a global market, most of them still rely on outdated software. For example, supply management chains use EDI technology which was introduced in the 1970s. In the same vein, SWIFT international bank transfers are also a technology that dates back to the 1970s. Often, such transfers took up to seven business days to process. The worst-case scenario is when the transfer gets lost in the network and the customer has to claim it back. Because of the outdated technology, most banks still process their operations only during business hours. Most of these processes are manual which takes up considerable time and resources.

Cryptocurrencies are much more automated thanks to the technology called smart contracts. These are pieces of software that automatically execute once a certain condition is met, which also makes them highly secure and reliable, excluding the human factor. To boot, most of the newly introduced blockchains have increased speed and throughput of transactions. Networks like Free TON and ICP are capable of processing millions of transactions per second, regardless of the physical location and jurisdiction of both sender and receiver.

As public or private secure ledgers of information, blockchains might be used in agriculture, academic institutions, healthcare, supply chains, and more. Basically, any area which needs to keep a reliable and independent record of information from many sources which is accessible to all the members of the network at once could benefit from using a blockchain.

#3. Dealing with fragmentation

When more and more independent companies provide similar services, the fragmentation of the various economic and business sectors increases. Most of the citizens in big cities are likely to have multiple bank accounts, as well as multiple accounts at exchanges where to buy USDT with a credit card. Also, they might have been to different doctors at different hospitals and they don’t have a single medical health history. Fragmentation becomes a real issue when it’s hard to maintain a single record of the property ownership, education, or health of an individual.

Blockchain has a chance to reorganize society. Social services built on a blockchain might gain more trust of the community because they won’t belong to a single entity and thus, will be impossible to corrupt. Each participant of the network will be able to see the full record of a certain chain at any given moment in time. Not only social services but also international networks, even as big as the Internet itself, might benefit from functioning on a blockchain. Since every participant brings some value in producing blocks and growing the ledger, such networks will be able to live without a single company owning and operating them.

Wrapping up, blockchain technology has a chance of reorganizing the ways in which participants of societies communicate and bring value to each other. However, a lot of blockchains are now owned by single entities and there is no single opinion about which blockchain is better than the other. One obviously decentralized blockchain is Bitcoin but if some large-investment individuals own the majority of Bitcoins, it will stop being as democratized as Satoshi imagined it to be. So if society will be able to pick at least one blockchain or operate with the help of multiple decentralized and interoperable blockchains, the changes might come about pretty soon.