The still young crypto industry is set to prepare for world expansion. Only 10 years after the emergence of the first cryptocurrency, along with the first real blockchain use case, the innovative technology has managed to capture the hearts and minds of traditional business. In the past months, the world’s largest companies — from Starbucks and Microsoft to Samsung and JPMorgan — have announced that they will be rolling out blockchain applications for the first time.
The first cryptocurrency appeared in 2008, invented by the mysterious “Satoshi Nakamoto”, who has since disappeared. From that time, the crypto space has grown and seen the development of more than 2,000 cryptocurrencies, as well as numerous blockchain solutions that present viable solutions to businesses and ordinary people. The crypto market, in total, has gone from nothing to more than $245 billion in market capitalization.
In its early stages, the crypto industry was rather a closed community for the Fintech elite. Now, however, it is open to the world and every day attracts more and more established companies. Starbucks, Microsoft, Samsung, JPMorgan, Societe Generale are just a few of the corporations trying to harness the power of blockchain.
Last year, the accounting firm PwC conducted research among 600 top managers of various companies in 15 countries of the world. It found that 84% of their organizations were either actively using blockchain in some way or looking into adopting it in the future.
On top of that, according to PwC, blockchain will generate an annual business value of more than $3 trillion by 2030, constituting from 10% to 20% of the global economic infrastructure.
Although crypto was originally envisioned as a challenger to big finance, large companies are fighting for their own piece of the pie. This process is fueling the mass adoption of blockchain and cryptocurrencies across the world. Here are a few examples.
Latte on blockchain
In early May, Starbucks — one of the most popular coffee shops in the world — announced plans to become the first major coffee corporation to use blockchain. Starbucks buys products from more than 380,000 coffee farms for its drinks, which poses a problem because traditional technologies are not able to trace such a high number of supply chains. This results in a lack of transparency, both for the company itself and for their customers.
Distributed ledgers can do this. Starbucks decided to track the coffee shipments using blockchain technology, allowing the beans to be traced at every production stage — from growing seeds to pouring coffee in the cup. Customers will be able to access that data via a mobile application that profiles the flavor and sourcing of each crop.
Starbucks has developed its “coffee blockchain” in partnership with tech-giant Microsoft and its service Azure Blockchain.
The company did not disclose when users would be able to use the new service, but stated that it showed a demo version to its shareholders in March 2019.
Microsoft is not only one of the largest players in the traditional technology market, but also one of the key players in the blockchain industry. The company has long been developing the Azure Blockchain Service, and the Starbucks case shows that it is already bearing fruit.
Starbucks is not a single one of Microsoft Azure’s client. On May 12 of this year, GE Aviation also rolled out a tracking system for the jet engines supply chain. It also works on the blockchain and is built in collaboration with Azure.
This is big news for the aviation industry, as GE Aviation accounts for about 60% of jet engine shipments worldwide. In addition, the company has already announced it will open a new system for its partners.
Yet Azure — a platform for developers to create their own blockchain solutions — is just one of Microsoft’s blockchain endeavors. The tech giant is at work putting blockchain to use within the company, as well. For example, on May 13, the company introduced a decentralized identification system built on a Bitcoin blockchain.
The project, named Ion, is designed to solve the acute problem of securing users’ personal data. One example of common data vulnerabilities is the ability of users to register with websites by logging in through social networks like Facebook and Google. In this process, the social network transmits the user’s information to an intermediary. As the recent scandals around Cambridge Analityca show, no one can guarantee 100% data integrity, nor that an intermediary won’t appropriate user for its own purposes.
Ion removes “the third wheel”, as it utilizes decentralized identifiers that can confirm the user’s identity without concentrating all their data in one place.
Given the scale of Microsoft, such a system can set a new standard for storage and use of user data. With Windows installed on 88% of all PCs and laptops in the world, the impact of Ion could be historic.
Blockchain in Smartphone
Manufacturers of smartphones are not lagging behind the blockchain revolution either, with Samsung at the forefront.
Back in early March 2019, the South Korean tech-giant introduced its flagship smartphone Galaxy S10. In addition to standard features, Samsung incorporated a built-in cryptocurrency wallet that supports Ethereum and ERC-20 tokens.
S10 also has some built-in decentralized applications. Among them are such projects as Enjin, Cosmee, CryptoKitties, and CoinDuck.
Already in May, Samsung announced that crypto features will also be available on its cheaper smartphones and that it plans to expand the number of crypto services. But so far it has not disclosed any details.
According to CoinDesk, Samsung is also developing its own blockchain based on Ethereum network, considering the release of own cryptocurrency.
At the same time, the South Korean tech giant is not hesitating to invest in crypto start-ups. In mid-April, Samsung contributed $2.9 million to the hardware cryptocurrency wallets manufacturer Ledger.
Ironically enough, considering crypto’s initial ambitions, financial institutions are also among fans of blockchain. In early February 2019, the crypto market was struck by news from JPMorgan. The financial conglomerate announced the launch of own cryptocurrency JPM Coin.
The bank plans to use crypto for part of the internal settlements of business customers, for which it transfers more than $6 trillion daily. By comparison, the total market capitalization of all cryptocurrencies is only about $244 billion, according to Coinmarketcap.
JPM Coin is currently in testing mode. The bank Spromises to present the results and move on to the implementation phase of the new system soon.
In fact, JPMorgan is not a newbie on the crypto market. The bank launched its own blockchain called Quorum in 2016. A year later, the financial conglomerate, in partnership with ANZ and the Royal Bank of Canada, developed the Interbank Information Network, which uses Quorum to speed up settlements between banks. Now, more than 220 financial institutions are participating in the project.
In general, banks are one of the most active fans of the blockchain, and they are constantly discovering new applications for innovative technology. For example, the French conglomerate Societe Generale Group issued bonds worth $112 million on blockchain in April of this year. The firm also released debt in the form of security tokens. Prior to this, the Spanish bank BVVA recorded a $150 million loan on the Ethereum blockchain.
Another 50 banks are currently testing a financial application for trading on the blockchain app called Voltron, created by technology company R3. And 5 Canadian financial institutions are using the SecureKey application, built on the IBM blockchain, for customer identity verification.
In just 10 years, the crypto industry has managed to evolve from an exclusive club for tech geeks to a mainstream technology that helps companies from completely different industries cut costs and improve their services.
If this pace of adoption continues, then the blockchain has the opportunity not only to fulfill PwC’s $3 trillion business value by 2030 forecast but also to exceed it by several times.