Inevitably there are some risks with such an easy, secure system of transferring data and money. One of these is taking its simplicity for granted.
As with many new technologies, regulators are still working out their approach to IoT data and payment transfers. For example, how should cross-border payments be taxed when they are automatically and near-instantaneously routed through potentially thousands of machines in dozens of countries? “Proper structuring, from both a regulatory and tax perspective, is necessary to ensure that you are minimizing any potential exposure,” warns O’Brien.
Meanwhile, there remains the question of who will reap the most benefit from this emerging super network of monetizable data transfers. Is it the people who generate the data — or the people who run the networks?
For existing major players in financial and information services, blockchain’s internet-based software origins could also pose a threat. If your business is traditionally offline, leaders in the online space could have an inherent advantage in this new digital transaction market due to their more established digital networks, business models and customer bases. With blockchain, social networks have the potential to transform into money transfer networks. Could this then remove a need for banks?
Dealing with disruption
As with so many digital breakthroughs, it is this potential disruption of existing businesses and business models that is the biggest threat from blockchain.
Information is power, and blockchain has the potential to vastly increase the amount of information available. New players are likely to find ways to analyze that information to identify whole new ways of working, just as has already happened with existing digital technology. Current industry leaders could see their dominant positions challenged. As with any new system of automation, some business services, jobs and career paths could also become obsolete — while new ones could be created.
“Whether you are a multinational, a small business or an individual, blockchain gives you the opportunity to take part in an ecosystem of data transfer and payment that we haven’t had access to before,” says O’Brien.
This is why “business leaders should not solely look at this technology as a way to improve current processes, but more as a way to pivot their business models. How will blockchain enable them to do business in areas they have not previously explored, to assess and respond to their customers’ needs, and to find the right partners to help them adapt and thrive?”