Blockchain has been one of the buzzwords of the year. But what is it? Why has the technology suddenly become in vogue?
Blockchain is the technology which underpins Bitcoin and other digital cryptocurrencies. It is a ledger system that offers accuracy and visibility over processes. Every action is recorded and independently verified by each member of the network. The ledger is public and unalterable, and so offers unparalleled accountability.
It provides 21st century security
Blockchain offers businesses a resilient and secure system for contracts and record-keeping, as well as number of other solutions. This is because the technology uses very high-standard encryption, making Blockchain secure by nature.
The inherent level of security means that the platform represents the ideal solution to protecting data, particularly in a climate where people are increasingly aware of the importance of properly and adequately storing data.
It has a wide range of applications
The fact that Blockchain is unalterable, too, is beneficial for recording things like health records, insurance records, and it could even help to facilitate better procedures for voting in national and regional elections.
There are also experiments into how Blockchain can be used for peer-to-peer trading, particularly in the energy industry. However, there are hundreds of potential applications; IBM, for example, is helping Canadian banks to improve data protection and helping Walmart to improve visibility and accountability across its supply chain.
This combination of characteristics means that Blockchain will help to create more efficient interactions while improving trust across the group of people involved in the interaction. So how can Blockchain help your business?
How Blockchain can help your business: In money matters
Given that Blockchain is fundamentally linked to cryptocurrencies, it has a clear role to play in the way that businesses can exchange money, be that for goods and services or for wage payment.
This may particularly be the case for businesses with a footprint in more than one country, where Bitcoin (or other currencies) may be favourable over traditional currency.
In terms of accountability and tracing payments, the proof element – whereby everyone in the network independently verifies each action – means that financial transactions will be much easier to track.
From a business perspective, this means tracing payments will be much easier; from a governmental perspective, it could help to improve transparency around the global movement of money and help to prevent global crimes such as trafficking and money laundering.
How Blockchain can help your business: Data storage and protection
As well as helping to record payments, Blockchain can be used as a secure medium for the storage of data.
This will have a positive impact for institutions such as hospitals and insurance companies who need to store large amounts of personal data which are subject to strict controls and regulations.
With the introduction of the GDPR in mid-2018, businesses will need to meet increasingly stringent requirements when it comes to protecting the personal and sensitive data of their customers and employees. Blockchain could offer the perfect platform through which to do so.
How Blockchain can help your business: Supply chains
We’ve written previously about how to cope with supply chain disruption, but thanks to Blockchain, this could become a thing of the past.
Blockchain has the potential to make supply chains clearer and more accountable, and this will have a knock-on effect for consumers who are concerned about the provenance of goods, or the ethics and sustainability of global supply networks.
While it is clear the Blockchain offers several benefits across a wide range of applications, it is worth stating that the technology is still in the early stages and that this caveat will delay any transformative changes.
As businesses and governments look for competitive advantages, however, the uptake of the technology will speed up – and that is when we will see the most interesting developments.