Blockchain for Business: Why You Should Care and How to Get Started
Blockchain, the technology that powers the virtual currency Bitcoin, is the talk of the town these days. No longer a mysterious, nebulous concept, Blockchain now carries significance way beyond merely fueling digital currencies. It is becoming big in business and far more valuable on the global scale than the cryptocurrencies themselves. Experts believe it is as big an invention as the internet. Advocates hail the tech as the answer to many business problems. And a growing number of organizations are sprinting to embrace the trend and explore a whole plethora of blockchain technology applications. So, if you are not educating yourself on how to use blockchain for business, you may soon find yourself trailing behind your competitors, because they surely are.
From Bitcoin craze to Blockchain domination
Chances are, you’ve heard about blockchain cryptocurrency mania now reaching its fever pitch. How does it make you feel? Are you thrilled to bits by Bitcoin’s wild ride and ready to pick up the new fad? Or… let me guess! The very mention of Bitcoin makes you cringe and roll your eyes, “Dream on, folks! It’s yet another bubble that’s going to burst!”.
Regardless of your stance on cryptocurrency, and whether the bubble keeps soaring or finally pops, Bitcoin will eventually play the second fiddle to its underlying technology. And that’s a fact! While still the hottest thing in the world of blockchains, Bitcoin and other cryptocurrencies are just a sneak peek at how Blockchain is going to shake up the world. Innovators, forward-thinkers and entrepreneurs across multiple industries begin to look beyond Bitcoin and focus on its underpinning tech, a fully decentralized and highly secure electronic ledger. If this is too much geek speak for you, let’s envision what lies behind the very concept of Blockchain.
Creating a brand new world
Imagine a world where you never get drowned in the sea of bureaucracy, because there are simply no intermediaries or central authorities. The blockchain system takes the need for third parties out of the equation and enables people, organizations, machines or algorithms to interact peer-to-peer. Deals are embedded in code and stored in shared databases where they can’t be altered, manipulated or tempered with. Every contract, process, and transaction is recorded and signed digitally, and can be verified and shared. A huge amount of record keeping is removed and a lot of red tape and redundant processes are eliminated. You are the one who owns the data you create (rather than some powerful forces like corporations and governments) and it’s up to you whether to monetize it or not.
We can now anticipate a future in which millions of people have a non-stop supercomputer in their pocket connected to the global network that will ensure the true value exchange, transform the old order of things in terms of roles, ownership and governance, and give rise to new business models.
The trust machine
Now you may be wondering, ‘This all sounds pretty good, but how can you do business with someone you never met before without resorting to any mediators? How can security, identity, and ownership be guaranteed across borders and continents?’ Blockchain technology might hold the key. The distributed ledger is the ultimate trust-building machine, empowering businesses that have never previously worked together and have no particular confidence in each other to interact directly without any middlemen or regulating parties. Blockchain creates greater certainty and transparency, offers genuine privacy protection and may well serve as a single source of truth and trust. The ‘tech genie’ has been let out of the bottle, and the future of blockchain for business looks big and bright. But for all the promise, the technology is still complicated and can be difficult to comprehend. Here’s a quick overview of how it works.
Blockchain is a kind of global infrastructure for immutable record keeping, a giant cryptographically protected distributed database. It validates identities and transactions, and maintains continuously-growing record lists, called blocks, through a resilient network of millions of devices. All records are updated in real time and unified simultaneously making the same information accessible to everyone. If something added by a user, looks legit to all the parties involved, it gets approved. Everyone in the ecosystem has controlled, secure access to a shared copy. This decentralized and transparent approach has immense implications for blockchain security, making the data records practically unhackable.
Applications and implications
The value of blockchain technology in banking and financial services is remarkable. It’s poised to become the way most business transactions are made. But, while the majority of new Blockchain application areas emerge in the financial sector, some see it going much further. The shared ledger technology is finding its way into many different domains, changing the way business is done. World giants like IBM, Microsoft and Accenture are known as early movers in adopting Blockchain for business. Read up on its potential impact on key industries that already use the technology or should expect to use it in the future.
Supply chain management is a ready market for the Blockchain technology. There is a long road between production and purchasing of a product, and consequently consumers know very little about the origin and quality of goods. Also, anyone working in supply chain knows the challenges that come with poor working and environmental standards, very short shelf lives of certain products and lengthy administrative processes.
Distributed ledgers excel at many fundamentals of supply chain management. Blockchains can track goods as they move and change hands, confirm the places and dates of delivery, ensure the quality, authenticity and availability of products, eliminate paperwork and minimize human intervention.
If you buy local food, you know where it comes from, who produced it, and most importantly, you know it’s fresh! A UK start-up Provenance offers transparent real-time tracking of consumer goods, ensuring that the backstories of the things we buy are genuine. Each product gets a “digital passport” that provides details about every step of the production process, ingredients, origin, etc. It prevents fraud and exposes many other controversies that have been haunting businesses worldwide.
Internet of Things
Blockchain technology will largely pave the way for the rollout of IoT. With more and more devices being hooked up and tech companies looking for ways to secure IoT data and accelerate its movement, the market for technologies supporting the IoT industry will continue to soar. And blockchain could serve as a missing link to guard against data tampering, provide trusted data exchange and cut costs for building IoT networks.
Take connected cars as an example. Automakers will increasingly turn to blockchain systems as the backbone for encryption, storage and secure data exchange. Besides, keeping vehicles safe from hacker attacks has become a key focus of the automotive industry. And while cybercriminals will seek to infiltrate payment systems embedded into connected cars, cloud-based shared ledger platforms can make payment processing fast and almost hack-proof.
Blockchain for energy has started to gain traction, and its potential in this sector is not lost on documenting processes or trading operations. The technology could prove an efficient mechanism for sharing renewable energy sources through distributed ledger networks. When alternative power supplies, like solar panels or wind turbines, produce excess energy, blockchain’s smart contracts can automatically redistribute it.
The Brooklyn Microgrid, an innovative start-up venture, is a living example of how blockchain-based solutions for energy management can disrupt traditional energy exchange processes. The New York borough’s locals are able to buy and sell power within the Microgrid community, using smart contracts for transactions and energy redistribution. The power is generated from rooftop solar panels, and in case of a blackout, residents on the grid continue to have electricity, switching to battery reserves. The Brooklyn Microgrid is just one of many technology use cases proving that the future of the energy industry belongs to Blockchain.
Perhaps no other industry suffers more acutely from piracy and unfair ecosystem than music. Artists find themselves left with crumbs after labels, streaming services and file-sharing sites take most of the value that musicians produce. Blockchain could help artists to bypass third parties, avoid copyright infringement and receive fair compensation for their work.
If the new music industry was a blockchain platform, any recording artist or songwriter could present their music directly off a ledger. Smart contracts would enable direct micro-payments from fans to musicians, ensuring the copyright holders are rewarded, and specify how the content is to be used. For example, as an artist you say, “OK, you want to play the tracks, it’s free! If you need a karaoke backing track or a ring tone, it will cost you this much, and you do it through a smart contract.”
This is no pie-in-the-sky dream: Blockchain’s potential to prevent piracy and protect copyrights is already coming to fruition in the music business. One of the early frontrunners in this area is a British singer and songwriter, Imogen Heap, who released her song Tiny Human through a blockchain platform, and is now working on her own blockchain-based initiative Mycelia that allows artists to secure a fair deal.
Ready to use Blockchain for business? Let’s do it!
These are by no means the only blockchain technology applications, and the list is growing longer, as Blockchain is maturing and more and more companies are making their way onto the scene. If you think the industry you’re in is ripe for blockchain innovation, or you have a specific project in mind, reach out to our experts at Skelia today to discuss blockchain development opportunities and keep your business on the cutting edge.