If you’re close to the technology or financial space, you’ve probably heard terms like DeFi, blockchain, and smart contracts more and more often. Ever since cryptocurrencies and other decentralized technologies came on the scene, they have been the subject of much speculation and debate among engineers and business leaders.
Some technology thinkers suggest that blockchain is the future of our society – that it has the ability to revolutionize all our businesses and interactions. Others believe it is just a fad that will eventually disappear. But many technology experts say that while blockchain is undoubtedly a force to be reckoned with, it is too early to say what its future will look like.
In the early days of the internet, it would have been hard to imagine business models like social media and e-commerce evolving today. Similarly, it is not easy to know exactly what a blockchain ecosystem will ultimately look like, but in its early stages it has a lot of potential for sustainable business models.
While no one can be sure how the blockchain ecosystem will ultimately evolve, leaders who enter and stay on top of this area in its early days will have the power to shape the economy of the future. That’s why it’s so important for business leaders to learn about blockchain and how they can use it; The best way to make sure you progress in the future is to be a part of shaping how it looks.
Blockchain: The basics
Although blockchain has spurred many new technologies, we can understand its basic principles with familiar concepts. The primary fundamental principle of the blockchain is decentralization. This is the opposite of the way the financial sector functions today. When you want to make a financial transaction, whether it’s individuals, companies, or both, you do so through an intermediary — in most cases, a bank. Blockchain eliminates the need for a third party as an intermediary to ensure trust through its consensus mechanisms. Ethereum has pushed the ecosystem forward by introducing smart contracts – contracts written in code that are executed automatically when all parties agree.
By using smart contracts and tokens (such as Bitcoin) to encourage users, blockchain creates a network that is decentralized, working on a number of nodes that can be owned by any individual. Instead of storing data in tables, as in a traditional database, blockchain stores information collections in blocks. Each block with transaction information points to a previously filled block, creating a chain of data blocks. This makes the records of transactions and information unchanging, ensuring transparency and security.
Web World 3.0
What are the practical implications of blockchain? Many technology experts see this as the foundation of Web 3.0, the next evolution of the Internet. While Web 2.0, the Internet as we know it today, consists of interactive platforms owned by companies such as Google and Meta, technology leaders envision Web 3.0 as a decentralized version of the Internet where users can share information or other values without the need for companies as intermediaries. .
While Web 3.0 still largely remains an idea of the future, startups have tested some of its capabilities. For example, cryptocurrencies test the ability to create and exchange value based on blockchain. Metaverse companies use a decentralized infrastructure to create online spaces for social networking and entertainment. Startups are testing the possibilities of using blockchain for anything from games to selling home repair services. Even large companies like IBM and Microsoft have begun to incorporate blockchain infrastructure into their businesses.
Blockchain is changing the way people do business
One of the primary effects of the blockchain is the creation of decentralized finance, or DeFi for short. DeFi uses fundamental value proposals of decentralization, pseudo-anonymity, and resistance to censorship to evolve beyond centralized entities within the blockchain ecosystem. In doing so, it provides its users with custodial ownership of their assets and access to decentralized money markets. DeFi has grown to more than $ 200 billion in assets and is evolving in its ability to finance real assets.
Blockchain has the potential to impact any area of business that includes ownership and asset concepts. For example, it may allow companies to create new revenue streams such as blockchain-based banking and financial applications or blockchain-based analytics services. It can also help companies mitigate risk in areas such as monitoring and authentication throughout the supply chain.
Blockchain can also have a significant impact on how companies operate internally. Blockchain can offer companies alternative digital asset management solutions such as identity, brand, origin or professional certification. Especially in areas such as auditing and regulatory compliance, the use of blockchains can significantly increase operational efficiency, allowing companies to save time and money.
Finally, blockchain can revolutionize the way companies manage their social impact. Anything from company management to an ethical resource can be managed using blockchain, creating greater benefits for companies at lower cost. Businesses and nations are already piloting the use of the blockchain as a more democratic means of governance, giving consumers or citizens more voice on what is happening to the organization.
Xiaohan Zhu, founder of Meter.io, a startup dedicated to providing blockchain infrastructure to connect the financial internet, has a vision that blockchain could be adopted to a greater extent. “The first real adoption of blockchain and cryptocurrency would probably be in the consumer sector. Then companies could use cryptocurrencies, NFT and other blockchain tools to expand their brands. ”
With companies like those in the ever-widening metaverse space, we are already seeing this adoption. But Zhu believes there is great potential for blockchain adoption in other sectors in the long run.
“Short to medium term, integration of Tradfi and DeFi with real-world assets (RWA) and sectors with low barriers to entry and change costs – P2P markets managed by smart contracts in the energy and TMT industries, origin of goods in consumer industries and health, process automation driven by smart contracts in all industries, compliance and auditing in the public sector – could be accepted, ”he says.
Infrastructure for the world that drives Blockchain
As companies embark on new blockchain business models or transform the way they do business in traditional industries and ecosystems, they will have to adopt blockchain technology for different purposes and uses. This creates the need for different architectures, consensus mechanisms, token types and other characteristics, paving the way for a multi-chain ecosystem.
Zhu’s project, Meter.io, provides this blockchain infrastructure, the technological and organizational components that companies need to use blockchain in their business. Meter.io creates a DeFi infrastructure that scales and connects Ethereum and other public blockchains, enabling the transfer of tokens and other digital assets between them. They do this through a development tool that not only connects to other existing blockchains, but also allows easy implementation of the new blockchain with its own architecture, consensus mechanisms and other features to achieve different goals and uses. Businesses could use the Meter chain directly to develop products or use a private blockchain launch tool in minutes with just a few nodes and smoothly scale to a public chain blockchain with thousands of nodes.
Their second solution, Sumer.Money, provides a layer of resource abstraction for decentralized applications. It allows companies to connect via blockchain in this multi-chain ecosystem and seamlessly communicate, collaborate, share and perform multi-entity transactions across multiple platforms.
If leaders want to stay at the forefront of the future of the blockchain, they will have to watch out for projects like Meter.io that build power infrastructure. While it’s still hard to say what the future of the blockchain will look like, the sheer amount of money and investment he’s seen in recent years suggests that, in one capacity or another, he’s there to stay. And with the opportunities that come with investing in growing sectors, it is safe to say that leaders can gain a lot by immersing themselves in the world of blockchain and experimenting with applications in their business.