This is a guest opinion post from Guofei Jiang, President of Intelligent Technology Business Group at Ant Group.
The COVID-19 pandemic that swept the world in 2020 is completely transforming the way people live, work, and interact with one another. Across the globe, more and more day-to-day activities are taking place online, further accelerating the digitalization of all sectors. In this context, fostering and maintaining trust between multiple parties has become increasingly valuable.
Blockchain, with its tamper-proof and distributed nature, is key to strengthening trust in this increasingly digital environment. This trend is evidenced by ever-growing investment in blockchain solutions, which had been expected to grow to US$15.9 billion in 2023, ten times more than the US$1.5 billion invested in 2018.
Now, with so much of the world adopting an increasingly digital-first approach to doing business, I believe the world might reach this number far sooner than expected.
In 2021, blockchain will play a more prominent role in a number of important sectors. For example, we expect to see increased deployment of blockchain to strengthen public goods and services, including by enhancing trust in areas such as education, copyright protection, healthcare, and food safety, amongst others. We also expect blockchain to become more integrated into the financial services industry, including in financing and risk control and management, as well as creating a more convenient, efficient, stable, and transparent operating environment for lenders.
Blockchain applications will also undoubtedly flourish in international trade. The COVID-19 pandemic has posed an unprecedented disruption to international trade. Blockchain has a crucial role to play in enhancing shipment tracing, contactless digital imports, and export transactions. For example, “Trusple”, an international trade and financial service platform powered by Ant Group‘s blockchain-based technology solutions AntChain, was designed to optimize and facilitate international trade.
Launched in September 2020, Trusple works by generating a smart contract once a buyer and a seller upload a trading order on the platform. This automated process not only mitigates the intensive and time-consuming processes that banks traditionally conduct to track and verify trading orders, but also ensures information is tamper-proof. Both factors previously prevented banks from providing affordable financing to international traders. Trusple significantly increases the level of trust among all parties involved in trade and makes it easier for traders to obtain much needed financing from lenders at a lower cost.
Recent advancements in blockchain technology, such as cross-chain, backend-as-a-service (BaaS), and privacy-preserving data computation, will further facilitate the secure flow of information between different systems and applications. These advances will also enable a wider range of partnerships to take place across industries and geographies, strengthening mutual trust while reducing costs for all parties involved.
These applications are a glimpse of the potential roles blockchain technology can play as we continue to recover from COVID-19. As more companies digitalize their operations to mitigate the impact of the pandemic, they will increasingly turn to blockchain to help facilitate trust in an ever-evolving world.
While we are optimistic about the outlook of the industry, it is not without its challenges. According to Gartner, global blockchain trial outcomes differ greatly by sector. Some sectors have demonstrated tangible progress rather than theoretical optimism, such as asset tracking, provenance, payments, while other use cases continue to struggle to gain ground.
In addition, given blockchain technology is still in the nascent stages of development, we expect to encounter more challenges over how it is applied and deployed. For example, given the tens of billions of smart devices available in the market, this could mean hundreds of billions of smart contracts operating at the same time.
While the long-lasting implications of the COVID-19 pandemic remain largely undefined, it is clear that a major task in 2021 and further into the future is finding the best ways to balance scalability and security on the chain, as blockchain technology is more widely used across the world.
For those of us at Ant, a big part of our efforts is dedicated to researching and developing solutions that address these challenges of blockchain. With its ability to strengthen the trust that is critical to surviving in the increasingly digital global economy, we can make it easier for companies around the world, especially SMEs that lack their own resources to do business anywhere.