Blockchain. Just mentioning it is the easiest way to show people you’re up-to-date with the latest emerging technologies. But what does it actually mean? And what if they ask you to explain it? Because two-thirds of people straight up haven’t even heard of Blockchain at all. And 80% of those that have don’t even know what it means. Do you?
How to Answer the Question: What is Blockchain?
If you’re looking for an easy-to-understand answer (or a snippet to quickly copy and past), here’s an example of how the emerging technology works:
“Right now, if you want to make a payment you go through a trusted middleman like your bank. But Blockchain is just a system that skips this. With it, you send your payment as a ‘block.’ A big group of connected computers then approves your payment and it’s added to ‘the chain.’ This is secure, transparent and recorded. And whoever you’ve sent the payment to can now access it.”
Need more information on the technology behind Blockchain? Carry on reading.
The Technology Behind Blockchain
First off, blockchain isn’t really new. But it is a relatively new combination of several proven technologies including the internet, private key cryptography and a protocol governing incentivisation. Let’s break those down:
The Internet: The foundation for both the world wide web and peer-to-peer (P2P) communication as we know them.
Private Key Cryptography: A pair of digital keys (one public, one private) that let Paul send Tim an encrypted message. To send the message, Paul uses Tim’s public key. To open it, Tim uses his private one. What this does is let us send secure messages and information over insecure channels without having to worry.
Protocol Governing Incentivisation: Just rolls off the tongue, right? Simply put, this is just the platform or protocol used. The system that sets the rules.
With these three building blocks, we’ve got a secure digital system! One that lets people interact directly without the need for a trusted third party.
So, How Does Blockchain Work?
Think of Blockchain like Wikipedia. It’s just lots of different people entering data into a record of information (or a Wikipedia page). No one person or company has complete control of a page, it’s a community effort. But here’s the difference…. what about the Wikipedia website as a whole? What about the backbone all that information is housed on? Well, that’s still kept under lock and key by Wikipedia’s admins. It’s a centralised database with one owner.
Blockchain is just the opposite of this. Because with blockchain technology, every bit of the network is communicating at the same time. No more direct line of data, a set of devices and databases all updating records at once. The most popular version then wins and becomes the official database.
Sounds great, but what does it mean for business?
What does Blockchain mean for Business?
We’ve heard that Blockchain will ‘reshape entire industries like financial services, healthcare, transport and logistics.’ But looking beyond the hype, what are the real-world business benefits of the technology? And where should Blockchain sit in the great big digital transformation journey?
The reality is that, like many technologies, Blockchain is still a long way from widespread adoption. But on the other hand, it’s probably still a lot closer than many businesses may think. Especially the 77% majority of CIOs that say they have no interest whatsoever in the technology.
By 2026, the business value added to the economy by blockchain will be a staggering $360 billion. Four years after that, it’ll be more than $3 trillion. And it’s the companies that are investing in Blockchain tech today that will reap those benefits tomorrow. While others will be stuck wondering how they fell so far behind. So, businesses need to start planning and piloting the technology today if they want to keep competitive tomorrow.
And What Does it Mean for Your Business?
Here are three ways the technology could change the way you do business:
Save On Costs: With Blockchain, you can send money and pay bills directly which either reduces or completely eliminates those third-party fees. This is often just a fraction of what you’d pay a traditional bank.
Smarter Contracts: Using Blockchain, you can also set up ‘Smart Contracts’ without the risk of fraud, interference or downtime. Again, with no unnecessary middlemen or intermediaries. These contracts are self-executing and absolutely unbreakable because they rely on lines of code and strict sets of rules.
Streamline Your Processes: One of the key advantages of the tech is that everything is recorded and tracked. Right now, tracking goods and resources often relies on fragmented systems that try taping together digital with manual processes. But with Blockchain and the Internet of Things (IoT), you can precisely track the transport of your goods or company resources in a system that also integrates a payment platform all-in-one.
We recommend reading our article: Lighthouse Projects: Navigating Digital Transformation
So, Where Do You Start?
It’s hard to know where to start with Blockchain. Incorporating any new or emerging technology into your business will always involve a learning curve. But by starting small with highly focused innovation labs or ‘lighthouse projects‘ you can test the tech and prototype ideas. We’ve helped large, multinational companies use mobile and emerging technologies to solve real-world business challenges and drive business performance. And we’d love to help you too. Give us a call on 01737 45 77 88 or send us a message at info@sonin.agency.