BlockChain is a new technology that will revolutionize business done in the 21st century. A goal of BlockChain is to distribute the power and trust of banks to a publicly held system. The future of this technology has many interesting implications that have had economists and others excited. I would like to talk about two fundamental changes that will occur in the future.
Built into the BlockChain is the idea of a public ledger, or a list of every transaction that has ever occurred with a cryptocurrency. A major benefit of a public ledger is it provides accountability for every person who uses the currency. Banks will no longer need to make some secret “FICO” score to judge whether you will repay currency on time, as this will be public knowledge. No government can decide to cut transactions or make backdoor deals, because their transactions will be logged onto the ledger. Alex and Don Tapscott, the authors of BlockChain Revolution, argue that BlockChain will change how accounting firms do business. Auditing a company will be a lot less challenging and less time consuming as the ledger will show all the transactions the company has made. Soon accounting firms will have to decrease their staff as their function will be to interpret the BlockChain data.
Another fascinating concept that the BlockChain technology provides is the idea of Smart Contracts. “A Smart Contracts is a transaction protocol that executes terms of a contract” (Tapscott, 2018). Smart contracts today can actually trigger cryptocurrency payments based on “codifying” agreements. An instance that intrigues me is the how artists and musicians can utilize this for themselves. No longer will musicians need to turn to distribution platforms and record labels to stop copyright infringement and sell music. A musician of the future will develop a smart contract that makes consumers pay a pico-payment for each song. If the payment faults the smart contract program will delete the song off of the users account stopping them from listening. BlockChain and Smart Contracts will cause artists to be paid directly, but also make record companies loose royalties.