Ever since the world’s first cryptocurrency based on blockchain technology, Bitcoin was launched in 2009 by an unknown developer or group of developers, Satoshi Nakamoto, blockchain has now experienced huge traction across the world.
Let’s first understand what blockchain is and then we will move on to how it will be in the next five years.
Blockchain is a digitally distributed, decentralized, public ledger that exists across a network. It is a form of a shared database that is immutable and always live.
The distributed databases are shared among the nodes of a computer network, as all the databases are stored on a blockchain electronically in a digital format.
Now that we understand what a blockchain is, let’s look at where blockchain technology will be five years from now.
Blockchain which is a core for any cryptocurrency has now been seen as a disruptor for the banking & finance sector. As Bitcoin was the first cryptocurrency built for peer-to-peer (P2P) lending, thousands of crypto projects have been launched solving various problems of the society.
Started as a platform for instant money transfer, blockchain technology is now adopted by many international banks and financial institutions globally.
As banks recognize the importance of what blockchain technology can bring to their sector, they have adopted it to cut huge transaction costs for remittances overseas, thereby passing the savings on to their customers.
A survey by Deloitte in 2021 found that nearly 76% of financial executives expect cryptocurrency to become a replacement for fiat currencies in global finance within the next 5–10 years.
This can be the future, as banks have already started building their own blockchain technology or some have started moving to blockchain systems that can be integrated into their current system.
The finance executives also believe that blockchain technology will completely change the banking & finance sector in the next five years. This will also help many unbanked people under the financial fold, which was till today not possible.
As per a World Bank report, there are over 1.7 billion unbanked people out of the global population of 8 billion.
Global companies like Credit Suisse, Axis Bank, IBM, JP Morgan, Santander, Western Union are using blockchain technology.
With its technology, blockchain has the opportunity to disrupt the $5 trillion banking & finance industry by removing intermediates from the process.
These intermediates often called third parties, work in verifying, making payments, clearing, and making settlements.
Apart from this, other sectors like stock trading & hedge funding, crowding, insurance, lending, education, energy, privacy, travel & mobility, transportation, logistics, aerospace & defense, hospitality, infrastructure, real estate, healthcare, claims & settlements, government records, land registry, voting, waste management, retail, e-commerce, food & beverages, gift card & loyalty programs, agriculture, mining, entertainment, gaming, sports, gambling, cloud computing, internet, charity, human resource, corporate governance, among others are some of the fields that are being disrupted by blockchain technology.
Several use-case projects are already in operation that solves problems faced by these sectors.
Over $1.7 trillion are already invested in such crypto projects based on blockchain technology and this is increasing day by day.
A few years back, cryptocurrency market capitalization was just $150 billion. A few months back, it was to touch $3 trillion.
If this trend continues, crypto experts believe that in the next five years, crypto market capitalization could easily cross $12 trillion to $15 trillion.
Nono-fungible tokens (NFTs), Metaverse is the next big thing built on blockchain technology that is now becoming very popular.
NFTs deal with any art in a digital form, Metaverse is users’ online life, where a user has his/her presence in the virtual world.
The only reason why blockchain is becoming so popular and gaining massive adoption is that it is transparent and all information is open to everyone and everyone is accountable for its action.
Today, over 400 million have been exposed to cryptocurrency, which is going to increase by many folds in the next five years.