Recording the Fourth Industrial Revolution | Blockchain | ITEK | Megatrends
The fourth industrial
revolution is the current environment where disruptive technology trends such
as the Internet of Things (IoT), Robotics, Artificial intelligence (AI), Future
Cars/Autonomous Vehicles, Blockchain, Cloud Computing, Genomics and Social Media
are changing the way we live and work.
Unlike previous industrial
revolutions, these technologies are rapidly combining to create an
accelerating, virtuous cycle of disruption. While past industrial revolutions
were often localized, today’s is interconnected and global with its impact
already visible in homes and businesses across the world.
This is a short guide to help
investors understand the emerging sectors of the fourth industrial revolution
and their features, applications, and growth potential. In part 6, we focus on the Blockchain theme.
Many people will have first heard about
Blockchain through its association with Bitcoin, but Blockchain's applications go far
beyond cryptocurrencies as it stands ready to create huge efficiencies across
almost every industry.
At its simplest, a Blockchain is a decentralised
list of records (blocks) that are linked by cryptography. Each block contains a
cryptographic record of the previous block in the chain, a timestamp and
transaction data. A verified transaction can include financial, contractual,
legal or other information. Once verified, this new block is then added
to the existing chain. Any additions to the Blockchain must be
validated by a majority of users, and a block cannot be altered once added, making
it highly secure, hard to tamper with and fast.
While the world of record-keeping
conjures up images of musty, leather-bound tomes, rooms of filing cabinets or
cavernous archives, it is the near universal need to record, validate and store
information securely that is providing real-world applications for Blockchain
and generating increased investment interest in the sector.
Why Blockchain is Useful
Security, tamper-resistance and speed
are the qualities that give Blockchain the potential to offer huge efficiencies
for any organisation or institution that needs to keep records or transfer
sensitive information securely; such as money transfers, medical records,
contracts, shareholder information, trade details or a vote.
Financial services is the sector that
has most rapidly embraced Blockchain, representing about 60% of spending. This
is perhaps unsurprising given the importance of transactional data for their
business, but Blockchain stands to impact a wide array of industries.
A recent Deloitte survey  polled nearly 1,400
executives from around the world on their perceptions of, and use of
Blockchain - 53% reported that Blockchain has become a critical strategic
priority for their company, with 71% citing improved security as the key
appeal. Of those polled, 40% are spending more than $5 million a year on Blockchain R&D or implementation.
An amazing 86% see Blockchain as a source of growth for their business in future, indicating that
Blockchain is not simply about creating efficiencies in existing processes, but
driving the creation of entirely new revenue streams and business lines. This
is a clear indication of the inter-connectedness of the fourth industrial
revolution where advances in one area, in this case Blockchain, can help propel
advances in other sectors and industries.
With small and medium size companies
increasingly adopting shared and private Blockchain solutions, it is likely to
play a significant role supporting the innovators and disruptors of the fourth
The full scope of Blockchain’s potential
remains uncovered, but Blockchain stands to confer significant benefits to a
variety of sectors over the shorter term, including
- Digital IDs and Passports: Reduce
bureaucracy and ID fraud
- Voting Systems: Prevention of voter
fraud or manipulation of e-voting results
Healthcare: Use of blockchain technology
could allow hospitals, doctors and other parties in healthcare provision to
share access to data securely and confidentially. This could result in faster
and more accurate diagnosis and more cost-effective treatment.
- Cyber Security: The immutability of the
Blockchain can help prevent hacking, theft or fraud and, by removing human
intermediaries, Blockchain reduces the risk of hacking or human error.
- Cloud Technology: Increased security
during a shift from centralised to decentralised cloud-based digital solutions
- Real Estate: Track titles, deeds and
help ensure documents are accurate and verifiable. Speed up and simplify the
process of buying and selling properties
- Smart Contracts: One of the most
exciting applications for Blockchain, smart contracts automatically create,
monitor and execute legal contracts, providing a more secure, more automated
alternative to traditional contract law.
- Finance and Banks: Faster cheaper and
more secure transactions and settlements.
- Ecommerce: Lower transaction cost and
- Supply Chain Management: Supply chains
are essentially a series of transaction between parties moving goods.
Blockchain enables secure and transparent tracking of supply chains - as products
change hands move through the supply chain, the transactions can be recorded in
a permanent decentralized ledger — reducing time delays, added costs, and human
- Digital Currencies: Bitcoin and other
alternative digital currencies
The real-world applications of
Blockchain are rapidly extending beyond cryptocurrencies as heightened
awareness of different uses grows and more R&D dollars are directed towards
Trends and Growth
In some ways, blockchain’s
long association with cryptocurrencies made it difficult for business leaders
to see real-world usage for the technology, but now a change in sentiment is
occurring as the applications of blockchain become better understood and the
technology becomes cheaper and more accessible.
Companies in almost every
sector are investing in the technology and human capital needed to implement
their own solutions, and many are creating their own private blockchains to
serve specific purposes.
Against this background, worldwide spending
on blockchain solutions is expected to grow from $1.5
billion in 2018 to reach $23.5 billion by 2030 
- a CAGR of 48.7%. Some analysts
predict an ever higher CAGR of 69,4%, making Blockchain one of the highest
growth-potential segments of the fourth industrial revolution.
in the Blockchain Theme
For Blockchain, the near
ubiquity of the need to send, record and store data securely creates a massive
addressable market. With applications in almost every sector, Blockchain can
offer long-term cost savings, increased operational efficiency and heightened
security while feeding into and benefiting from growth in other sectors. Investors who see long-term opportunity can consider
an allocation to The HAN-GINS Global Innovative Technology UCITS ETF (ITEK).ITEK includes Blockchain as part of 8 transformational technology trends that
are reshaping the world alongside Robotics & AI, Cloud Computing & Big
Data, Cyber Security, Genomics, Social Media, AR & VR and Future
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Article Date: 19th June 2020.