And, what exactly is it?
Blockchain is the breakthrough underlying technology that was invented originally along with Bitcoin.
While Bitcoin is still highly speculative, and not recommended for most enterprise use, Blockchain is thought to be one of the most transformative technologies to have been invented since the internet.
That’s a big claim, but not without justification. It can disrupt activities related to managing transactions (for example, bank transfers), just as the internet disrupted information access.
Think of Blockchain as a digital ledger of transactions – a spreadsheet if you will. Now imagine that this is duplicated thousands of times across many networks and constantly reconciled. What you get is an immutable record that’s easily accessible but virtually impossible to corrupt because it constantly self-audits across the multiple copies. It is for this reason that Blockchain is considered to be un-hackable – at least for the moment.
The Possibilities of Blockchain
Because Blockchain uses distributed data and is easy for multiple parties to access, while still being highly secure, it’s a tool that will disintermediate the middleman in any transaction. That’s one of the reasons the financial industry is both nervous and excited.
A large chunk of their work today is to intermediate between parties. In the securities trading arena, up to 10% of all transactions still have some error that needs to be manually addressed in order to settle trades. That is a multi-billion dollar saving opportunity in fees for cash settlement. Another logical use would be in voting. While several countries are looking at the possibility of e-voting based on blockchain, several corporate and community organizations have already jumped on this. Abu Dhabi’s Stock Exchange introduced e-voting for its annual general meetings. Estonia has use cases in validating services for residents, and in corporate shareholder meetings.
Examples of use cases:
The potential use cases are innumerable. Unsurprisingly. it turns out that the combination of highly decentralized transactions, easy access to many parties and extremely high security can disrupt just about any transactional activity system. These are just a few examples for illustration and inspiration.
Practical information you need to know:
Is Blockchain over-hyped?
- Yes – like most disruptive technologies in their early stages. But that’s not a good enough reason to ignore it. It’s powerful enough to dramatically impact your business.
Re. Blockchain’s un-hackable claim – wasn’t the Bitcoin exchange Mt Gox hacked?
- Yes. Although the blockchain itself was secure, the wallet keys to access the currency were not secured. It’s like putting stuff in a vault, but then being careless with the keys. It’s a good lesson on the importance of strong, secure foundations for the infrastructure around the blockchain itself.
Where to start?
- Look at the intersection of transactions that need security, and those that are distributed across parties. As with AI, start with re-using use cases that others have already created, which can be reapplied in quick and low-cost ways.
Understanding blockchain possibilities
- There are plenty of resources online that list all the possible use-cases of Blockchain. Match that against your needs to get going. Think of developing new use cases when you’ve gained enough experience in the technology in your organization.
Watch-outs and limitations
- There are a large number of limitations – but nothing that cannot be overcome. It’s important to avoid over-extending yourself with any emerging technology, including Blockchain. Start small. Also, as with any exponential technology it’s critical to understand what you’re doing. Don’t outsource it; in fact, never outsource something you don’t understand.
What Should You Do?
Blockchain is another perfect example of an upcoming technology that has the potential to transform your business in both an efficient and effective way. However, it is still in the process of being mastered across platforms. What does this mean? It is exactly what every other rising technology in the business world means. Get educated on Blockchain, utilize its benefits and start early on use cases. The technology may be disruptive, but it is the use-cases that deliver business outcomes.
As always- innovate with discipline for endless prosperity!
This is an excerpt by Tony Saldanha from his best-selling book, “Why Digital Transformations Fail.”