Blockchain is No Longer a Buzzword
The argument that blockchain is just a buzz-worthy fad is no longer a battle cry by its loudest critics.
Blockchain network image lic. 1794954085
As we roll into 2021 from an ongoing pandemic, it’s pretty easy to find quite a number of Fortune 500 companies and household name businesses putting blockchain to good use.
Many have already deployed solutions they’re using to make a measurable difference in how they do business, bringing us as consumers a better experience.
To understand the use of blockchain in business and rationales behind this shift at enterprise level, I wanted to touch on a few of the major footholds that seem to have now become a foundation for value.
While I could write for days on the processes involved in making a decision to use blockchain or not, here are what can be identified as core qualities where blockchain moves from just a buzzword to actual problem-solving.
Blockchain is a powerful technology of choice for validating source.
If you want to know for sure your coffee beans, green beans, sardines or blue jeans are organic, natural or not produced through human trafficking, blockchain can best solve that.
Traceability of manufacturing from birth to expiration of material goods, food or even energy, can be hashed on a shared decentralized ledger solution with immutable entries securely protected from alteration.
This linearity of travel all the way into consumer hands can be visibly traced and tracked by providing access to users based on roles and permissions.
A powerful use-case currently impacting daily groceries and where we shop can be seen with WalMart Canada and DLT Labs™ using Hyperledger Fabric™. This is a really good study and something to consider for nearly any industry, such as automotive, marine and aerospace.
Validation of who you say you are is fundamentally vital to prevent payment fraud, preventing unapproved access, and ensuring personal safety.
We are so used to showing our driver’s license or passports, but at the rate hackers are phishing emails, digital signatures and spoofing wire transfer information, we see hundreds of billions annually misdirected in payment fraud and growing.
Blockchain can be a very effective tool in solving immutable identify validation and providing a trusted method through secure access to prevent altering that information so personal identity stays protected and safely exchanged.
“Decentralized Identity”, or DID, is quickly emerging as a sophisticated, yet simple means of bypassing the need for conventionally storing or sharing passwords or sensitive personally identifying information. An encrypted version of your identity is kept on the blockchain, and your DID can then be used to securely transact digitally online and not worry about being hacked.
While there are dozens of use cases evident in the numerous companies currently providing DID services, a really cool emerging solution from IBM at alpha stage is their IBM Verify Credentials™.
To get an idea of how DID works, IBM provides a sandbox anyone can go in and build a decentralized identity application to open a bank account with a fictional “BigBlue Credit Union”.
Whether finance, legal, trade or retail, automated smart contracts can solve saving millions and secure transactions in the billions.
Smart contracts in blockchain simplify processes and actions, such as managing portfolio assets, by allowing contracts between parties to execute against predetermined business rules that have to be unanimously met across a series of nodes (computers) that each look for all rules criteria to be met before allowing that transaction to take place.
Here are just a handful of current examples of how smart contracts in a blockchain are being used:
In insurance, the encryption features of blockchain can use smart contracts to oversee fraudulent or suspicious actions within an account, as well as speed up verification and claims processing.
In entertainment, the blockchain ledger is providing a visible and transparent transmission of royalties to all parties involved with the music creation, as well as help artists protect their creativity and claim royalties for their work.
In healthcare, smart contracts are providing coordinated and secure sharable transactional digital records for payers, providers and drug manufacturers with pharmaceuticals, as well as tying these into usage of drugs all the way down to consumer level as part of secured, sharable health records using blockchain.
A good, real-world example of how smart contracts are in use today is with Propy™, a global real estate marketplace with a decentralized title registry system. The online marketplace uses blockchain to make title issuance instantaneous and even offers properties that can be purchased using cryptocurrency.
Determining Blockchain Use
McKinsey provides a really good analysis in solving how to compete using blockchain, namely in address how to optimize a blockchain strategy based on your own business market position.
While the complete study can be found here, interesting to note is how determination of the best strategy for each use case is solved by market position and one’s ability to influence industry standards and regulatory barriers.
Credit: McKinsey & Company
The study points out that blockchain does in fact have measurable strategic value for business by enabling cost reduction and in the longer term, creation of new business models.
Key to note is that existing digital infrastructure and growth of pre-packaged blockchain-as-a-service offerings have also lowered the costs of businesses testing the use of blockchain and is further helping companies bridge the gap to adopt.
While all of us in technology do realize blockchain is still at its nascent stage of emergence, it is already showcasing an ability to create greater transparency, fairness save businesses time and money.
And in so many ways, impacting our future from how contracts are enforced, to making governments work more efficiently.