What used to be e-mail at the beginning of the Internet is now Bitcoin for Blockchain technology. It will take a while before Blockchain can unfold its full potential. Nobody can predict exactly how long it will take. However, we can estimate which types of applications can be used first. So for this we have created a Blockchain framework that contrasts the degree of novelty of the technology with its complexity.
Each quadrant represents a level of technology development. The framework is designed to help understand the challenges, the degree of collaboration, and the legislative and regulatory effort required. It should also facilitate the introduction of new innovations and give you an idea in which direction the Blockchain technology can develop.
The first quadrant describes applications that create more cost-effective and faster solutions. The degree of novelty and complexity is not very high. At the beginning of the Internet, email was an inexpensive alternative to the phone or mail. Bitcoin also falls into this quadrant as an alternative payment method. Bitcoin is growing rapidly and is becoming increasingly important for instant payments and trading foreign currencies and assets. It goes beyond the boundaries of current financial systems.
The second quadrant includes innovations that are relatively new, but only require a certain number of users to create value. So these applications will build on the product’s optimization applications to connect enterprises over private networks. We expect a strong increase in private Blockchains used for specific purposes in different industries.
The third quadrant consists of applications that are relatively new, but build on existing applications from the 1st and 2nd quadrants. These innovations make it possible to replace entire business processes. However, the complexity is enormous and it will be difficult to convince others of the new innovations as they will change fundamental structures. New currency systems that have emerged from simple Bitcoin payment technology could completely change payment processes.
In the last quadrants fall applications that could completely change economic, social and political systems. Smart contracts and Decentralized Applications can be such applications. Not only payments, but entire companies can be completely digitized and automated. In addition, companies can use a Blockchain to signal that a certain product has been received – or the product could have GPS functionality that automatically generates a location update log.
When contracts are automatically concluded, what happens to traditional corporate structures, processes, managers, lawyers and accountants?
These roles would change radically, but nobody knows how exactly. However, we are still decades away from the widespread introduction of Smart Contracts. There must first be an enormous amount of coordination and clarity about how Smart Contracts are designed, verified and implemented. We believe that the institutions responsible for these huge tasks will take a long time to develop.
We are curious to see what applications will change the world in the coming years. Of course, the development of new products in combination with a new technology is always a big challenge. But we agree that Blockchain will drastically change the future for the better.