A survey released by the World Economic Forum (WEF) suggests that “Distributed Financial Technology” will go mainstream in 12 years. This includes distributed technologies such as Bitcoin and cryptocurrency, the Internet of Things, and blockchain technology. This WEF survey comprises of over 800 executives and experts going into great detail about Bitcoin and blockchain technology, lauding their great potential throughout the entire paper.
All hail ‘the blockchain’
The survey explains the eventual result of these new tech ideas that are expected to produce a significant number of global shifts within the decade.
An excerpt from World Economic Forum mentions:
“Bitcoin and digital currencies are based on the idea of a distributed trust mechanism called the ‘blockchain,’ a way of keeping track of trusted transactions in a distributed fashion.”
The WEF believes that innovations such as Bitcoin will impact people around the world, bringing to life the concepts previously only seen in sci-fi movies. The organization says that sharing economies are producing a phenomenon that usually was only available to technology-enabled entities such as corporations and governments. Blockchain technology helps bolster these emerging markets within traditional financial services until eventually it gains “critical mass” acceptance.
Bitcoin and blockchain technology offer a lot of positive attributes to the financial system of today, according to the WEF. By removing barriers to entry, the blockchain not only includes a greater number of people in the global economy, but also a chance to democratize wealth.
In other words, the blockchain facilitates disintermediation and reduces dependency on fallible humans by relying on mathematical computations for proof and the blockchain itself. It also produces an “explosion of tradeable assets” as all kinds of value can now be housed on a distributed ledger.
Additionally, the mechanism also initiates a better form of smart contracts and property based records in emerging markets. Thus, the WEF believes that the blockchain gives the ability for anyone to make smart contracts, escrow agreements etc. while increasing transparency via a publically accessible and distributed global ledger.
The sharing economy’s ‘main ingredients’
The World Economic Forum has put a lot of research into understanding these new economies emerging across the globe. One such phenomenon is the “sharing economy,” which the WEF sees to be expanding “at a level that was not nearly as efficient or perhaps even possible before.” The WEF notes that these applications and inventions have significantly reduced transaction cost and friction in the financial system of today, giving “economic gains” for all involved.
Additionally the survey mentions a few ride-sharing business examples like Uber and Lyft to underscore the implementation of such a business model. All of these emerging technologies are available at a moments notice, explains the WEF, as most of them work with location services and mobile applications.
Inventions in technology and the way they are distributed are what WEF calls the sharing economy's main “ingredients.” The survey gives great reasoning to why the blockchain, Bitcoin, 3D printing, and more have emerged globally, offering a “collaborative consumption” of wealth worldwide.
“Assets can be shared, creating not just new efficiencies but also whole new business models and opportunities for social self- organization. The blockchain, an emerging technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities.”
Ultimately, the WEF believes that these technologies will reach a tipping point with distributed technology reaching about 10% of the global GDP. That would translate to US$8 trillion leaving the traditional finance system and redistributing to a lot more people worldwide. Therefore, the WEF estimates that everyone will have access to distributed financial technology by the year 2027.
The World Economic Forum is composed of over 2,500 international business leaders and members who produce a series of surveys every quarter. The Switzerland-based foundation is recognized around the world as a leader in economic research and education.