Why UAE businesses need to move on blockchain

For nearly a decade now, the world’s most forward-thinking companies have been experimenting with blockchain technology to improve their existing systems, streamline efficiencies, and generate cost savings. In a few short years, blockchain usage has gone from a handful of early adopters to more than 80% of global corporations. Businesses around the world, and in the UAE, in particular, need to act quickly to incorporate sustainable solutions like blockchain to future-proof their brands and compete in the Web3 economy.

Why move to blockchain technology?

A recent report by Blockdata found that 81 of the top 100 public companies are already incorporating blockchain technology, with solutions ranging from initial pilots to production-ready services that are integral to their processes today. Blockchain is fast becoming an invaluable tool to optimise resources, reduce costs, and open up new revenue streams. This robust distributed ledger technology allows businesses to enjoy new levels of transparency, accountability, data integrity, and security across their operations. 

Major corporations such as Whole Foods, DHL, and Walmart are managing their supply chains more efficiently with blockchain’s immutable ledger, which can drive efficiency, increase transparency, and reduce costs. As a decentralised technology, blockchain runs over multiple nodes rather than relying on centralised servers that act as honeypots to hackers. Businesses can, therefore, use blockchain to circumvent the threat of cyber attacks that are set to cost the global economy more than $10 trillion by 2025.

In the energy sector, increasingly hampered by administration issues and shortages, companies are investing in blockchain to distribute power more efficiently. Using smart grids, peer-to-peer transactions can occur autonomously through pre-programmed smart contracts ensuring optimal use of resources. UK-based Energy Networks Association has already invested around $20 billion in smart grid acceleration — and this trend is on the rise.

In sports and entertainment, blockchain is driving fan engagement with major clubs and teams from the NBA to the Champions League and FIFA turning to blockchain technology to incentivise and reward fans through digital collectables, fan tokens, and other items. Governments, too, from Estonia to Nigeria, and the UAE are turning to blockchain to digitise data from healthcare records to government transactions. 

Dubai has pledged to be the world’s first city powered by blockchain technology, turning this vibrant global tech hub into a paperless city and generating as much as $1.5 billion in savings per year in document processing alone. For context, that’s equivalent to the value generated by the Burj Khalifa every year and saves around one million trees. Abu Dhabi, also, is passionate about promoting blockchain throughout the MENA region and will be hosting the Middle East’s first blockchain awards ceremony in November 2022.

What’s Preventing Businesses From Going All-in on Blockchain?

With so many benefits to blockchain technology, what’s preventing businesses from going all-in? Well, blockchain’s growth hasn’t always been linear. Original blockchains such as Bitcoin and Ethereum received a barrage of negative press for their heavy energy consumption, lack of scalability, and high transaction fees — all blockers to efficient and sustainable business models. 

So-called Proof-of-Work (PoW) blockchains rely on an energy-intensive practice known as ‘mining’ which lends computational power to the network to achieve consensus and run autonomously without intermediaries. The enormous amount of energy this requires is akin to the annual consumption of a medium-sized country every year. 

Other PoW chains like Ethereum, which recently switched to the less energy-intensive model Proof of Stake (PoS), have a tendency to overload as transactions increase, causing slow turn-around times and high fees. The popularity of the collectable cat game CryptoKitties brought Ethereum to a halt in 2017 and sent transaction fees rocketing. In 2022, the NFT app Bored Apes Yacht Club had a similar effect with some transaction fees hitting more than $1,000. 

Even after the change to PoS (known in the industry as ‘the Merge’), which reportedly makes Ethereum 99.5% more energy efficient than PoW, transaction fees remain prohibitively high and throughput too low for many business use cases.

The New Generation of Blockchain Is Upon Us

Fortunately for businesses, the new generation of blockchain is already upon us. Algorand, which runs on a more decentralised, secure, and scalable version of Proof of Stake, is enabling businesses to build sustainably across different verticals (from cross-border payments to healthcare, gaming and entertainment to government interactions). Not only is PoS green by definition but Algorand is also the world's first carbon-negative blockchain, offsetting its minimal carbon emissions through a partnership with ClimateTrade.

Algorand tackles the lack of scalability of other blockchains by offering a highly agile platform with sub-four second transaction times and a low barrier to entry. 

The Algorand ecosystem is growing fast, particularly in the MENA region, with more than 2,000 organisations already leveraging the technology.. The world’s most powerful and sustainable blockchain is also the first and only to be selected as FIFA’s official blockchain partner, underlying the new FIFA+ Collect digital collectables marketplace. The Algorand platform has been adopted by global governments as far-reaching as Nigeria and El Salvador to build out new infrastructure for their citizens, and in the UAE, Algorand is making waves as well.

Algorand will be hosting its second annual gathering of builders, founders, investors, and strategists at Decipher 2022 in Dubai to spur the imagination of innovative entrepreneurs from around the world, with talks and workshops taking place across multiple sectors from local government to decentralised finance (DeFi), music and entertainment to gaming. Top leaders from across the crypto industry will participate in the event, including leaders from Binance, FTX, Kraken, Flare Network, Fireblocks, Copper, and more.

Closing Thoughts

With the challenging issues facing humanity today, from the cost of living to the climate crisis, UAE businesses need to move on blockchain to scale sustainably and cost-effectively. Algorand’s world-leading platform with its ease of use and low barriers to entry provides the perfect solution for new and established businesses to successfully navigate the future economy.