What’s Next for Blockchain?
As blockchain technology continues to mature, its applications are growing into a wide range of industries. Learn how blockchain’s next generation use cases may have the potential to change everything from air and automotive travel to foreign currency exchange and green energy investment.
The enterprise blockchain industry has experienced a subtle, yet important shift in the past year: there’s less talking and more doing. This shift from visible blockchain experimentation to behind-the-scenes blockchain implementation as part of full-scale solutions may represent the next step change for the industry.
At J.P. Morgan, we have been focused on implementing blockchain by advancing the initiatives that we think will be the most important for our clients and will help drive the technology forward. A recent example is our development of J.P. Morgan Digital Coin for payments, which bridges traditional payments rails and blockchain networks.
Blockchain is still in its early stages and there is much to prove, but when sending value can be as easy as sending information, or when creating value can be done through creating code, it’s no wonder many refer to blockchain as the foundation for the future Internet of Value.
Next Generation Blockchain Use Cases
Below are some next generation use cases that are uniquely enabled by blockchain.
Decentralized Digital Identity: Decentralized, self-sovereign (or self-managed), digital identity may enable a person or business enterprise to have control over their data and full transparency of who can access specific data attributes and commercialize them. Large, global organizations are now rolling out the first versions of these types of solutions. For example, the World Economic Forum and Accenture have developed a prototype of Known Traveller Digital Identity. It may allow for more secure and seamless identity validation for travel using biometrics and distributed ledger technologies.
Green Energy Registration and Trading: Given the world’s focus on sustainability and the decentralized nature of green energy generation from sources such as solar panels and wind farms, there has been steady progress from large power companies around the measurement, registration, trading and settlement of eco-friendly megawatts. Pairing the ability to measure green energy generation at the project level with tokenized project equity ownership and financing could enable sustainable energy investors to monitor the number of megawatts generated from each of their discrete green project investments—a verifiable and quantifiable green return on investment.
Vehicle Identity and Telematics: There has been an explosion of activity exploring a wide variety of blockchain use cases in the automotive industry. These include supply chain tracking of vehicle parts, dashboard digital wallets, vehicle-to-vehicle payments, vehicle co-ownership and ride-share tracking. While some use cases may sound like science fiction at the moment, i.e., autonomous vehicles in a rush paying other autonomous vehicles to get out of the way in a traffic jam, there are some promising and practical applications available today that may improve processes related to registration and financing.
A Multi-Blockchain World
Given the broad range of applications, the various networks that are being created at different speeds and the rapid evolution of the technologies available for use, it’s unlikely that we will converge to a one-blockchain-network world. Instead, we envision multiple blockchain networks of multiple protocols meshed together.
To this end, our team at J.P. Morgan has long acknowledged that interoperability between blockchains will be key. We recently helped develop technology that enabled the Monetary Authority of Singapore and the Central Bank of Canada to execute a cross-currency, cross-blockchain swap using Hash Time Locked Contracts (HTLC). This enabled two independent blockchain networks to communicate in a standard message format, trigger escrow of funds and subsequently transfer those funds.
We are also developing a gateway layer above the core protocol that will make it simpler to interact with multiple blockchains. Our vision is to enable payments on other networks, not just our own, and to facilitate communication in a standard, secure way.
Succeeding With Blockchain
There are three key questions that anyone new to blockchain technology can ask in order to increase their chances of success:
It’s impossible to know everything about the technology, but understanding the basics and demystifying the jargon can help you get started.
Understanding what others in your industry are doing with blockchain can help you understand where the technology may or may not be relevant to your business.
As with all technology solutions, expect to invest time and money into implementing blockchain. Honing in on addressing a pain point, having a clear goal for a return on investment and strategizing on how to drive market adoption are key factors to success.