The internet and modern computers are the faces of the revolution for modern-day commerce. However, as much as we have closed the distance and increased the speeds of channeling information, blockchain technology would surely far surpass that. From a basic understanding of what blockchain technology is, we expect that this would allow users to utilize a peer-to-peer network thereby reducing or removing the role of an intermediary.
Although we have seen this used in cryptocurrencies like Bitcoin, blockchain technology can very much revolutionize, or rather, return us back to a point where we can directly interact with others from a transactional point of view. To further elaborate on this idea, we can think of it as a typical interaction between merchants trading goods amongst each other, but with a modern-day technological twist. The implications of this technology can greatly change the way we can buy or sell with each other on a daily basis, but at the same time, re-evaluate public opinion and policies on a new and experimental technology.
From a social aspect, blockchain applications can allow users to directly interact with each other online without the help of a company or middleman. If one user wished to transfer funds to another user, they are capable of doing so in a manner that could be much faster and more convenient than with a company involved. However, a possible area of concern that could arise from a peer-to-peer setup is a diminished role of regulations and policies.
Under the involvement of a company, there is a level of control to mitigate risks of misconduct or fraudulent activity when dealing with regulated transactions. Such activities would therefore be considered under adverse selection which companies try their best to reduce by maintaining some level of transparency and enacting penalties outlined in a contract or term of agreements. Furthermore, there will be questions regarding the possibility of placing a level of regulation on the technology and a whole set of ethical issues will arise. More on this will be discussed further on.
Economically, the removal of an intermediary could theoretically remove transaction and service fees that effectively drive up the costs of a typical transaction, if any. Here, this could possibly bring growth and increased activity in the economy since purchases are basically considered cheaper than before with the removal of transaction costs. The incentive for average users to engage in a direct transaction with another willing individual could possibly increase virtual traffic. There will be a high likelihood of an emerging new sub-industry under the technology industry as a result.
Blockchain technology may also affect more than just the technology industry; as we have already seen it, this technology could very much change the face of currencies and how we use them. Therefore, central banks could experience a massive shift in the currency market and how it can control the overall money supply of its own country. This may become even more difficult for these banks to apply capital controls if they choose to do so.
As we continue to progress into the future and implement technologies that our forefathers never would have thought possible to exist, the aspect of distance only manages to become a secondary thought as a result. Probably a central concern is how to manage or govern this type of technology. This type of technology has not been widely used for a long period of time like the internet, so a wide array of ethical issues will arise from the usage of blockchain. Certain industries could gain from this while others may lose due to the sharing capabilities of the blockchain. Even existing laws and policies could go through revision once blockchain technology becomes more popular.
From the other areas discussed above, fraudulent activity could very much become a constant threat in the currency market if cash transfers are capable of being duplicated. The power of blockchain technology is not be underestimated, and its imperfections could be more outstanding than ever if management is not well-considered. Imperfections will always exist in any idea, especially a ground-breaking one.
However, it does not entail that blockchain technology is bound to failure. In fact, it is quite the opposite. With the introduction of the internet, many new issues arose and were tackled quite swiftly by implementing new policies and even more ground-breaking improvements. Despite the ethical concerns that blockchain technology could impose, this will only induce more improvements to the revolutionary technology and carry the modern world further into the future.