Blockchain is the new buzzword on the block; and while many business leaders, managers, developers and IT departments are Googling it and left scratching their heads, others are wising up to it, are realising how brilliant it is, and are recognising the opportunity it’s going to bring and the potential impact it will have.
If we put aside the tech behind it and focus on what it can do, it’s actually capable of disrupting many industries and bringing new innovations not only into finance, but also property, automotive, music, trading and healthcare.
To make it easier to understand what blockchain can bring to businesses, think about how a Google Doc enables people to access and make updates in real time. No need to save over and send new files to all and sundry, as the next time someone opens the doc it will be the most up to date as the file automatically keeps a record of who made which changes and when, as that digital address is native to the cloud, not the local hard drive. Google Docs is to Microsoft Word what blockchain is to a traditional ledger system.
Google Docs is to Microsoft Word what blockchain is to a traditional ledger system
Startups and large corporations are working together to figure out how this ‘shared ledger’ concept can benefit their businesses. And this concept of data retention is at the heart of cloud-based technology.
Cloud technologies are the forerunners to blockchain and developers and designers who are creating new innovations in this space, should keep an eye on blockchain opportunities too. Private blockchain networks can run in secure cloud environments and we have witnessed test collaborations between Google’s cloud services, IBM, Microsoft and Amazon and if successful, these cloud services could play a role in blockchain deployments.
Applying blockchain to business
Let’s take a look at some use cases and how blockchain can be implemented in different industry sectors to speed up processes, guarantee security, trust and transparency and keep accurate records that can be accessed by stakeholders, no matter where they are in the world.
Property: You’re buying a house and want to know when the last repairs and updates were carried out, which companies provided them and when. Blockchain could help homeowners and estate agents keep a record of information relating to a property, which would be centrally located for anyone in the house buying and selling process to access – reducing hours of paper pushing and phone calls and create transparent information on the status and maintenance of the house before putting in an offer.
Automotive: In a similar way to housing, tracking the value of second hand vehicles through blockchain would make purchases a lot easier for buyers and traders. Information on the car’s mileage, services, and driving history would be accurate, and if the car was ever written off the information could be accessed digitally to salvage the new gearbox that was installed only two months ago.
Music: There has already been massive disruption in the music industry but in the age of streaming services, blockchain could show musicians, creators, fans, marketers and labels the data and dialogue involved in listening to their songs and albums. Artists would be much closer to their fans and over time they could influence and reward them. A truly democratic and commercially viable way of promoting music. Thanks to blockchain.
Banking: Most big banks have a headline piece highlighting how they are working with blockchain especially within security. The technology promotes security and trust and allows all parties to work with one single reference point, which can cut manpower and middlemen costs.
As with any new technology, there are stumbling blocks. Commercial banks may not want all that information to be managed by developers so private blockchains may need to be created. It’s important to take a collaborative approach so banking organisations can pool their resources, identify and share hurdles and resolutions.
Trading stocks and shares: Nasdaq has successfully completed a blockchain test in Estonia to run proxy voting on its exchange and is now assessing whether to implement the new system as it has streamlined a process that was highly manual and time consuming. Nasdaq is one of the early adopters and a supporter of the technology in the exchange industry and already uses it to power its market for share of private companies It is also launching a marketplace powered by blockchain for pre-IPO private securities exchange in the USA.
Blockchain as a service is the most viable way for the technology to scale
Healthcare: Within healthcare, blockchain promises to address security and data integrity issues relating to patient information within healthcare providers, hospitals, insurance companies and clinical trials. IBM Watson teamed up with the US FDA to trial a data sharing initiative to keep track of patients involved in a particular trial and they are going on to explore how a blockchain framework could potentially provide benefits to public health.
Blockchain as a service: Blockchain as a service is the most viable way for the technology to scale. Start-ups like Chain.com are making blockchain applications much more accessible to big corporations. It is probably the most recognised ‘blockchain as a service’ platform startup as it lets enterprises use blockchain technology in a variety of network infrastructures.
Where to next
To put into perspective how big it could become, the World Economic Forum predicts that by about 2027 about 10% of the global GDP would be stored on blockchains so companies looking to get their piece of the action should start investigating now.
Silicon Valley investor Marc Andreessen cites blockchain as “one of the most fundamental inventions in the history of computer science" and we’d agree. 2017 is going to be the year it is tested, trialled and iterated to suit individual market and business requirements.
All that without even mentioning Bitcoin – we’ll save that for another day.