Don’t underestimate the strength of the blockchain
Blockchain technology isn’t limited to cryptocurrencies—in fact, its potential is huge.
One of the great challenges of digital transformation is that it is not a one-time thing. You can’t simply complete a company-wide digital initiative then rest on your laurels, content that the future is secure. The digital age is about continual change, constant disruption and the semi-regular emergence of completely new technology paradigms. Miss out on a relevant innovation and your organization could fall behind the competition. The recent hype around microservices is a great example of this.
Blockchain seems to be a good candidate for the next big digital thing. Right now, it’s at the early stages of public consciousness and industry understanding. Ask someone in your organization about it and you’ll likely get a reply along the lines of: “Blockchains? You mean like Bitcoin?” And while cryptocurrencies remain the most well-known use case, the range of potential applications is vast and at least one true believer is saying blockchain represents the next major step in the Internet’s evolution.
Blockchain technology is essentially simple—just a way of structuring databases as a series of blocks of transactions, each block inextricably linked to the previous one, to prevent tampering. But this simplicity is deceptive because blockchain is potentially very powerful. Recognizing this, a handful of organizations across sectors have begun adopting it. This early adoption may be somewhat tentative as blockchain is also deceptively complex and hiring experts on the technology has proved challenging.
Given the technology’s roots in cryptocurrency, it is perhaps unsurprising that blockchain adoption is most widespread in the financial services sector. Blockchain technology is especially appealing for financial enterprises that deal with unreliable, costly or slow transactions. In these contexts, blockchain’s ledger-based approach is ideal because it is reliable, immutable, irrevocable and transparent. Nevertheless, the appeal of this approach is felt beyond the financial sector.
Outside financial services, blockchain is primarily used in media and telecommunications. To media companies, in particular, the technology presents powerful new methods for allowing customers to pay for content one piece at a time. Additionally, companies like Ascribe are exploring its potential for digital rights management. The travel and hospitality industries are also starting to adopt blockchain technology, using it to simplify the process of settling bills and to support loyalty programs.
Blockchain technology is even making some inroads into healthcare and government. For healthcare and life sciences organizations, the blockchain is useful for securing digital assets, optimizing record keeping and safely sharing patient information with external service providers. Public sector organizations are also using the technology for record keeping and it is proving to have great potential for preventing corruption—the Honduran government, for example, is planning to use blockchain to prevent fraud in land deals.
So, to answer your question: No, it’s not just about Bitcoin.
Even if cryptocurrencies turn out to be a mere fad, blockchain seems here to stay. And it is, in fact, part of a larger trend—disintermediation. As blockchain removes many intermediaries previously required for trust and rights management, it is likely to be highly disruptive. For instance, it could greatly streamline the process of evaluating items for insurance purposes. Disruptive use cases like this offer huge opportunities to early adopters and inflict significant damage on laggards.
It’s important to make sure that—when it comes to blockchain technology—people in your organization aren’t asking “Isn’t that something to do with Bitcoin?” Instead, they should be asking “What are we doing to take advantage of blockchains?”