As we march towards an unknown future, there appears to be a swift change coming. A technological transformation of the way businesses and citizens go about their daily activities.
Artificial intelligence (AI), blockchain, robotics, and automation are a set of technologies regularly reported in the media that will replace jobs as we currently know them.
How could a future labor-less economy prosper?
Will 2020 be the year you see blockchain start to reach its potential?
Gartner predicts fully scalable blockchain projects by 2023. Algorand, founded by the Massachusetts Institute of Technology (MIT) Professor Silvio Macali, is a next-generation blockchain project helping pave the way to this new financial future.
Silvio Micali has been on the faculty at MIT, Electrical Engineering and Computer Science Department, since 1983. In 2012, Silvio won the prestigious Turing Award, an annual prize given by the Association for Computing Machinery to an individual selected for contributions “of lasting and major technical importance to the computer field”.
Later in this article, I’ll share with you why a blockchain application called a smart contract seems to be the ultimate advancement for financial systems.
Starting blocks — the end of average
Before we even begin to entertain a new future with innovative technologies, we need to look at how we will transform ourselves.
In this 4 minute video, The End of Average, you will see the inspirational story of high school dropout Todd Rose. Todd, now a Harvard Professor, talks about his vision for overhauling the education system. His view for repairing the education system to help kids develop to their full potential. He founded the Harvard Laboratory for the Science of Individuality, which has the vision to tailor learning to meet the individual needs of a child.
Redesigning education is vital for both adults and children. The future of work seems to need a shift from learning processes to embracing innovation and life-long learning. However, any new teaching style that wishes to embrace individual thinking must also remember to teach teamwork.
For many years, education technology has been a growing area. Now, the pandemic seems to have made this once optional way of learning a must for everyone. You can go online and learn just about anything. This style of education is essential to help everyone prepare for the dynamic future of work. Who knows when you might need to learn about some niche technology that hasn’t been invented yet?
Technology education platforms like Coursera serve over 20 million registered learners by partnering with 140 of the world’s leading universities. In April 2019, Coursera raised an additional $103 million of financing to help grow its education platform.
“The global market for higher ed is worth $2 trillion,” Coursera’s CEO Jeff Maggioncalda ~ Forbes.
If you would like to learn more about blockchain as a business person, check out Blockchain Basics on Coursera. In this course, you will learn about current popular open-source blockchain projects and the original cryptocurrency Bitcoin.
If you are a developer, then check out Algorand. They have an excellent developer learning center, and great experts to connect with for any advice or assistance you may need on developing blockchain technology.
Emerging technologies are now, and the best time to start learning about them was yesterday.
Banking on blockchain
Blockchain is one industry that captured my imagination to help transform society for the greater good. I started researching, analyzing, and presenting on this emerging technology about five years ago. Many builders of this technical innovation that I have met want to start new financial systems to help all citizens. As such, blockchain entrepreneurs started with disrupting banking systems and operational activities like global transaction fees.
Global banking transaction fees generate around $1 trillion of revenues every year. McKinsey (2019)
Why are smart contracts smart?
Smart contracts are one development in the blockchain that could help lower the cost of transaction fees. Smart contracts are applications built on top of a blockchain solution. In the industry, they are referred to as decentralized applications or Dapps. These digital programs are an innovative way to build on top of a blockchain.
Smart contracts enable financial transactions to be settled without the need for human intervention. They do this using computer coding rules and business logic.
Real-world examples for smart contracts use;
- Escrow accounts
- Loan payments
The above examples currently need intermediaries to complete financial transactions. However, a smart contract that is tailored to your requirements allows the payment to occur automatically. Additionally, being built on top of a credible blockchain can help enhance security.
Why build new financial systems?
Imagine you are a small business owner, and you want to offer your customers a card payment options. Firstly, you are charged for holding a business bank account. Secondly, to obtain a card payment terminal, you are charged for having the machine even if you are not using it. As the payment machines are only available to rent, you have a monthly charge before you start earning.
There are also fees on top of using the terminal. These fees are percentages of the customer bill if paying by card. Depending on the type of card a customer uses to pay you, some card issuers charge up to a 3% fee. The business owner cannot pass any of these charges onto the customer.
Furthermore, as we have recently seen, some businesses temporarily had to shut due to the pandemic, but they still have charges to pay.
Building a new financial system from the ground up using blockchain is one way to enable transaction fees to be lowered. Lowering global transaction fees, as an example, could help small business owners to be more in control of their cash flows.
Algorand is one blockchain technology company looking at addressing lowering global transaction fees. They have created their own advanced smart contracts by innovating a new computer language. This technical advancement for payments hopes to help build the economy of the future.
If you can execute a financial payment on a secure system that can automatically settle, this can reduce costs and open up the innovation of secure digital currency payments, which could be more economical to operate than legacy currencies.
Are we there yet on rewriting the financial services systems we currently have using blockchain technology? No, but we are getting there, and in the next five to ten years, this technology could help transform our world.
Blockchain is only one part of many components of science and technology that could help enable the transformation of our world.
Emerging technologies, growing divides, and the pandemic seem to be pushing the changes upon us rather quickly. This transformation is also a seemingly permanent evolution. To be sure, 2020 has accelerated this technology transformation.
The World Economic Forum (WEF) thinks blockchain is one technology that can help with transforming society. WEF states in their blockchain toolkit executive summary:
“Blockchain has the potential to revolutionize how companies compete, and stakeholders collaborate in the world…”
The human condition seems to be one of building it, setting it, and forgetting it, until we can no longer stand the result or unknown disaster strikes. These changes force us to take the risk to change.
It seems this time the change has been pushed upon us as we reimagine our world of work beyond 2020.
Originally published at Data Driven Investor on August 3, 2020.