Blockchain technology has the potential to boost global GDP by US$1.76 trillion over the next decade, PwC said recently.
Through analysis of the top five uses of blockchain, ranked by their potential to generate economic value, a recent report by PwC gauges the technology’s potential to create value across industry, from healthcare, government and public services, to manufacturing, finance, logistics and retail, the auditing and consulting firm noted.
“Blockchain technology has long been associated with cryptocurrencies such as Bitcoin, but there is so much more that it has to offer, particularly in how public and private organisations secure, share and use data,” said Steve Davies, Global Leader, Blockchain and Partner, PwC UK.
PwC identifies five key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research.
Tipping point in 2025
The analysis suggests a tipping point in 2025 as blockchain technologies are expected to be adopted at scale across the global economy, PwC noted.
Tracking and tracing of products and services or provenance. Emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic, it has the largest economic potential (US$962 billion). Blockchain’s application can be wide ranging and support companies ranging from heavy industries, including mining through to fashion labels, responding to the rise in public and investor scrutiny around sustainable and ethical sourcing.
Payments and financial services. These include the use of digital currencies or supporting financial inclusion through cross border and remittance payments (US$433 billion).
Identity management. This, amounting to US$224 billion, includes personal IDs, professional credentials and certificates to help curb fraud and identity theft.
Contracts and dispute resolution (US$73bn) and customer engagement (US$54bn). Theseinclude blockchain’s use in loyalty programmes further extends blockchain’s potential into a much wider range of public and private industry sectors.
Benefits across regions
Across all continents, Asia will likely see the most economic benefits from blockchain technology, PwC said.
In terms of individual countries, blockchain could have the highest potential net benefit in China (US$440 billion) and the US (US$407 billion), according to the company.
Five other countries - Germany, Japan, the UK, India, and France – are also estimated to have net benefits more than US$50 billion.
Benefits across sectors
At a sector level, the biggest beneficiaries look set to be the public administration, education, and healthcare sectors, PwC said, adding that these sectors are estimated to benefit approximately US$574 billion by 2030 by capitalising on the efficiencies blockchain will bring to the world of identity and credentials.
Meanwhile, there will be broader benefits for business services, communications and media, while wholesalers, retailers, manufacturers and construction services, will benefit from using blockchain to engage consumers and meet demand for provenance and traceability, PwC predicted.
C-suite needs to support blockchain implementation
One of the biggest mistakes organisations can make with implementing emerging technologies is to leave it in the realm of the enthusiast in the team, Davies pointed out.
“It needs C-Suite support to work, identify the strategic opportunity and value, and to facilitate the right level of collaboration within an industry,” he said. “Given the scale of economic disruption organisations are dealing with currently, establishing proof of concept uses which can be extended and scaled if successful, will enable businesses to identify the value, while building trust and transparency in the solution to deliver on blockchain’s potential.”
Energy overhead needs to be managed
PwC warned that if blockchain’s economic impact potential is to be realised, its energy overhead must be managed.
Growing business and government action on climate change, including commitments to Net Zero transformation, will mean that organisations need to consider new models for consolidating and sharing infrastructure resources to reduce reliance on traditional data centres and their overall technology related energy consumption, the company added.