CEO Blockchain Understanding: Your Future Depends Upon It
Blockchain Technology has massive implications for almost all aspects of our lives. Nothing has shown such wide sweeping promise since the Internet or the latest generation of Artificial Intelligence.
Executives across all industries need to know what blockchain is, what is possible and how it can affect their industry today. There is other technology like Tangle and Hashgraph, but blockchain will be the focus of this post.
First, Forget about Bitcoin
When Bitcoin broke into public consciousness in 2013, it couldn’t have been sexier: a digital currency being used to buy everything from drugs to cupcakes. Then the excitement shifted to an aspect of Bitcoin that is a bit less sexy: public online ledgers. Blockchain, the technology used for verifying and recording transactions is what is at the heart of Bitcoin. Since Blockchain is so much bigger than Bitcoin, you need to focus on the underlying technology and not a single product that was produced. Separate your opinion of Bitcoin from your perception of Blockchain.
Second, be able to explain blockchain
Blockchain has been coined many things, from the next stage of the Internet to a trustless system of value, and even the most important technology ever invented. So, what is Blockchain?
Blockchain is a decentralized, transparent and verifiable system where value, such as ownership titles, medical records, and cryptocurrency can be exchanged. This value is stored in something called a digital “block”. The blocks are linked together in such a way that the unique digital identity of the next block is linked to the identity of the previous block, hence, 'block-chain'.
This Blockchain is shared on a peer-to-peer network, where a continuously updated Ledger keeps track of who owns what, and these ledgers are secured by mathematics. The entire system is distributed among a network of computers rather than resting with a single provider.
This means that data can't be tampered with without anyone knowing. And finally, there are many different blockchains used for different applications.
Third, think of future growth through ‘Smart Contract’ opportunities
An important concept to know is the idea of smart contracts. Blockchain enables a new class of apps called Smart Contracts. Smart contracts basically replace what people would do within any contract or agreement. For example, say you have two parties; Party A and Party B that agree on some terms. In a smart contract, these terms or conditions are written into code. When the conditions have been satisfied the contract is automatically executed.
Think about the effort involved in that concept; No lawyers, no company has release funds, no disputes, no middlemen needed. It's all automatic. Done exactly as both parties have defined in the agreement. This means you can take this idea one step further and link smart contracts together to create an entire company that does things automatically. This is called a decentralized autonomous organization or DAO. The result eliminates waste, reduces risk of fraud and opens up a whole new world of automatic systems.
Fourth, let current blockchain projects inspire you
In early 2017, Harvard Business School professors Marco Iansiti and Karim R. Lakhani said the blockchain is not a disruptive technology that undercuts the cost of an existing business model, but is a foundational technology that "has the potential to create new foundations for our economic and social systems". IBM alone is working on 400 different blockchain projects with 63 clients. Below is a list of projects in various sectors that you should be aware of:
Dubai has set its sights on becoming the world's first blockchain powered state. In 2016, Representatives of 30 government departments formed a committee dedicated to investigating the opportunities across health records, shipping, business registration and more. It's estimated that the blockchain will amount to $1.52 billion in savings per year. Much of this enhanced productivity will stem from moving to a paperless government. With blockchain document processing removing around 100 million paper transactions a year.
Other examples in government include the UK, Estonia and South Korea. The Estonian government has partnered with Ericsson on a blockchain initiative to create a new data center where all public records are stored on the blockchain. Samsung is creating blockchain solutions for the South Korean government which will be put to use in public safety and transport applications and the UK government is also working on blocking technology for pension payments.
Cybersecurity is a prime area for blockchain adoption. Guardtime is a company trading keyless signature systems using the blockchain. It is currently being already used to secure the health records of 1 million Estonian citizens. Guardtime is also working with DARPA, Lockheed Martin and Ericsson.
From a healthcare perspective, the company GEM is a start up working with the Center for Disease Control. They're going to put disease outbreak data up onto the blockchain which is hoped to increase the effectiveness of disaster relief and response. Other companies like SimplyVital Health has a few blockchain related projects going on. One of them tracks the progress of patients after they leave the hospital and another one provides decentralized blockchain patient records.
Of course, Financial Services is exploring the technology. Barclays Bank has launched a number of blockchain initiatives involving tracking financial transactions and combating fraud. Barclays executives claim " ...blockchain is a fundamental part of the new operating system for the planet."
At the intersection of machine learning and blockchain, Augur allows the creation of blockchain-based predictions markets for the trading of derivatives and other financial instruments in a decentralized ecosystem.
Supply chain has many projects going on, some of the more promising include Provenance, a project that aims to provide a blockchain-based provenance record of transparency within supply chains.
Reliance Industries, has said that it too is developing a blockchain-based supply chain logistics platform along with its own cryptocurrency, Jiocoin. Ultimately, this will create an ecosystem that drives loyalty for India's biggest conglomerate. SKUChain is another blockchain system for allowing tracking and tracing of goods as they pass through a supply chain.
Consider Utilities, what if a community could produce and sell their energy to each other through a smart-grid? Transactivgrid has been doing this since 2012. Their goals are pretty simple: reduce extra costs of distribution and transportation, energy wastes and reinvent the sense of sharing in a local community.
Retail is an obvious space where companies like Open bazaar is attempting to build a decentralized market where goods and services can be traded with no middlemen. Real estate ubiquity is a start up that's creating a blockchain driven system for tracking the completed legal process which usually creates friction and expense in the real estate transfer.
Even recently revolutionized areas like transportation are open to blockchain adoption. Uber may have quickly transformed the market, they too can be on their heels if they do not have greater awareness. Arcade City has created an application which aims to move ride sharing and car hiring onto the blockchain, taking on Uber and Lyft directly. La'Zooz is a community-owned platform for synchronizing empty seats with passengers in need of a lift in real-time.
Blockchain is more accessible, scalable, and secure for businesses today
It's early days but it seems the biggest winners will be the organizations that adopt blockchain to remove the middlemen. In as soon as 5 years from now, blockchain or a similar technology, will be ubiquitous. Executives need to think in terms of their problems and solutions as they relate to a distributed network. Blockchain is the missing link to more efficiently share information and data with others at a faster pace.