Blockchain: Beyond Cryptocurrency

As with any new technology, the innovation adoption curve describes the categories of groups involved in the technology at different times. For adopters of  blockchain, the curve looks like this:

• Innovators: The first 2% of adopters;
• Early Adopters: The second 13.5% of adopters;
• Early Majority: The third 34% of adopters;
• Late Majority: The fourth 34% of adopters; and
• Laggards: The last 16% of adopters.

Over the last two years, research has found between 13-16% of Americans have at one time owned cryptocurrency. This falls squarely into the Early Adopters Category and is approaching Early Majority. While many are still skeptical of cryptocurrency, the underlying technology is likely here to stay due to the multitude of uses beyond cryptocurrency.

The history of crypto and blockchain began when a white paper was released in 2008 by the pseudonym Satoshi Nakamoto which laid out the concept of bitcoin and the underlying blockchain which made it functional. While the code and formulas that run blockchain are far too complex for this article, the concept boils down to this:  Blockchain is a digital ledger kept by numerous decentralized computers which solve formulas to validate the authenticity of transactions and add them to “blocks” on the chain. This ledger is secure due to the large number of independent sources validating each transaction and maintaining the chain which may be reviewed at any time by anyone.

This concept of decentralization is what helped drive its popularity following the great recession of 2008. But where can this technology be utilized outside of cryptocurrency?

Earlier this year, the California Department of Motor Vehicles announced it is testing the use of blockchain to digitize vehicle titles which could improve the efficiency of tracking and transferring titles to vehicles. This could foreseeability be applied to any type of title including real estate. Streamlining these traditional administrative concepts could reduce the cost and time associated with any such transfer.

The government is not the only one looking to utilize blockchain. Private businesses and industries are adopting it as well. Blockchain can be used in supply chain systems so shippers and food manufacturers may better track inefficiencies or identify the origins of problems. This may allow for recalled food items to be pinpointed and tracked to a specific farm. Similarly, this tracking could help combat illegal practices due to increased traceability. Companies are doing this in the seafood industry to encourage sustainable practices, assuring customers the products they eat are sustainably sourced.

These are only a few examples of how blockchain technology has been adapted to the world outside of cryptocurrency. Industries including finance, arts, and healthcare are utilizing the technology. Although we are still early in the innovation adoption curve, the future looks to contain blockchain and it will be best to understand how it may be involved in your life.

The attorneys at Danna McKitrick are continually staying informed on how these changes impact law and will influence changes to your business, employment, property, or estate planning.

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