The application of blockchain technology in an economic structure may take a lot of time before reaping tangible benefits, but any successful implementation can create a huge impact on society, the ambassador of Barbados to the UAE said.
A positive impact on gross domestic product, decreased expenditure, safer financial systems and job market growth would be among the benefits, with a foresight into the future helping assess the scale and strategy of investments needed to leverage the innovation.
"When you look at these types of technologies, it is less about investing in them and more on what is coming out of them, and how can they be applied to the government and nation," Gabriel Abed, who is also managing director of financial software platform Bitt, said at a panel discussion during the Fantom Developer Conference in Abu Dhabi.
Blockchain was thought to be limited to cryptocurrencies, but is now being used in more sectors, owing to its secure structure, open ecosystem and flexible application. The developer market has increased exponentially in the past few years, creating a competitive sector offering more choices for potential users.
A study from PricewaterhouseCoopers shows that blockchain has the potential to boost global GDP by about $1.76 trillion over the next decade.
This would be possible with five key applications and the projected economic value they would generate. These include tracking and tracing of products and services ($962 billion); payments and financial services, including use of digital currencies ($433bn); identity management, including helping curb fraud and identity theft ($224bn); application in contracts and dispute resolution ($73bn); and customer engagement, including its use in loyalty programmes ($54bn).
Supporters of the technology believe that it could enhance the distribution of government services, particularly in emerging economies, which would provide identity services and even help to enhance freedom of speech and anti-corruption activities.
With the emergence of new-age technologies such as blockchain, the criteria for determining the right investments has changed and governments must take all factors into consideration, Mr Abed said.
"A big part about investing is doing research required in any particular asset class or commodity that you're buying. We need to find out how we can leverage technology in the best way," he added.
"The No 1 failure of entrepreneurs is a lack of focus, so it's important to concentrate on your bets," Harry Yeh, managing director of Quantum FinTech Group, said.
However, a UN chronicle warns that it is a relatively immature technology and can create as many problems as it solves. "What it has offered so far is a series of key insights into emerging technologies and how we can approach them in a rapidly-changing world," it said.
While downside risks absolutely need to be considered, Mr Abed said that this "new mindset" into investing provides the opportunity for creativity and anticipation to tackle any challenge that may arise when developing and implementing blockchain and other related technologies.
"A relatively good investor prepares for the now, but they invest because they see the future," he added.