Investopedia/Donna Fuscaldo: 13 Industries Blockchain Could Disrupt:

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13 Industries Blockchain Could Disrupt: Baird

By Donna Fuscaldo | December 12, 2017 — 11:23 AM EST
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Blockchain, the technology that underpins cryptocurrencies such as bitcoin, is all the rage but not only because of its pivotal role with digital currency. Companies of all stripes are embracing the software that lets users store and keep track of information in a decentralized digital ledger to grow and improve their businesses. As the technology becomes more mainstream, Baird analyst Colin Sebastian identified 13 industries where it may have the biggest impact. (See also: What Happens to Your Bitcoin If There Is an Apocalypse?)

Take the Internet of Things (IoT) market for starters. In a research report covered by Barron’s, the analyst said that as more devices are developed to talk to each other online, blockchain technology could play a big role in verifying the information being shared. Sebastian pointed to Samsung Electronics (SSNLF) and International Business Machines Corp. (IBM) as two technology companies that are already developing a decentralized network of IoT devices via blockchain.

The analyst also thinks blockchain can replace the middleman when it comes to booking services online or accessing music and movies. He said blockchain could enable taxi drivers and customers to connect directly, eliminating the need for services like Uber, while the same can be said of fans and musicians removing the need for Spotify-type offerings. Even social media could be enhanced by blockchain, making it less complicated for content creators to spread the word about their offerings and thus get paid more. (See also: Blockchain Is IBM’s ‘Best Hope for Recovery’: UBS.)
More Change Coming

While Amazon.com Inc. (AMZN) has long been a disruptor, entering new markets and completely changing the way business is done, blockchain may do the same to it, predicts Sebastian, if buyers and sellers can connect directly. He said so-called smart contracts in the blockchain could create ratings for buyers and sellers to ascertain the quality of the product and the reliability of the parties involved in the transaction. Online marketing could also be overhauled with companies building platforms that don’t need the help of third parties. It could also potentially lower the amount of click fraud, the analyst said. Retailers could also embrace blockchain to improve their loyalty programs in hopes of boosting sales. Movies and music aren’t the only areas of entertainment that could be impacted by blockchain. Sebastian also pointed to video games, eSports and online gambling as areas that could change because of the technology.

The virtual currencies that are found in digital games could become tokens that are transferable and used to purchase things. The analyst noted that Gameflip and DMarket, the two startups, are already eyeing the ability to make the virtual money into tokens. Meanwhile, blockchain could improve multiplayer video game competitions in the world of eSports while online gambling, which is a popular target for hackers, could get more secure thanks to blockchain.  Other industries that may be impacted include cloud storage, money transfering and digital wallets.

While banks have been leading the charge in blockchain, Sebastian thinks its technology companies that will drive it further.  "While the vast majority of 'Blockchain' related jobs appear to be at start-ups, consultants, and large financial services (IBM, Microsoft, Fidelity, Invesco, Capgemini, Bank of America, JP Morgan are among the top recruiters of blockchain specialists), we expect that technology and Internet companies will quickly become more engaged with the opportunities," he wrote in his note.


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