The COVID-19 pandemic has created the worst disruption to social and economic order in modern history. The ensuing monetary responses, while successful in averting a global depression, have further widened the income and wealth gap among different social groups. It also highlights the conundrum of a deepening digital divide as the unintended consequence of the information age.
If there is a silver lining, the blossom of blockchain technology is just another testament to human perseverance in times of crisis. There is no coincidence between the advent of blockchain technology in the wake of the 2008 global financial crisis and the great leap of faith in the crypto industry amidst the full blunt of global shutdown.
The blossom of blockchain technology is just another testament to human perseverance in times of crisis.
Blockchain’s unique promise lies in its revolutionizing invention to decentralize and disintermediate the profession of transactional bookkeeping, a classic case of creative destruction striking at the very core of the financial industry. It is my belief that over time it will permeate a broad spectrum of our society with profound social and economic impact, by virtue of the following unique attributes:
Transparency allows open access to transaction history in real time.
Immutability protects data integrity from tampering, thus enabling reliable authentication for asset ownership and record keeping, etc.
Trustless ledger eliminates redundant intermediaries, reducing agent risk and transactional cost alike.
Consensus mechanism ensures a decentralized and secure network.
These attributes have given blockchain a broad prospect and increased attention. As an increasing number of institutions worldwide begin to recognize the vital role blockchain plays in building a digital society of the future, strenuous efforts have been invested in spurring the adoption of blockchain, which is a catalyst for greater efficiency, especially in finance.
In the traditional financial system, massive data are stored on intermediary platforms. In most cases, however, these data are only accessible to financial intermediaries and algorithm-based platforms instead of individual users, resulting in information asymmetry and an ineffective credit system. Blockchain gives birth to a freer, safer, and fairer environment for financial transactions: All users are allowed to initiate, participate in, and verify a transaction while accessing all the information recorded on-chain, thereby boosting the efficiency of future financial transactions.
Today, after over a decade of development, blockchain has been applied in domains far beyond digital currency and has evolved from a niche innovation into a mainstream technology. I believe this is just a beginning: With huge untapped potential, blockchain is bound to bring us a better and more efficient future in a lot more areas.