Blockchain offers enterprises a raft of opportunities | Oct18 Newsletter
Cryptocurrencies may have fixated everyone with their insane valuations that have hogged the limelight over the past few years, but as the hype dies down, the focus has rightfully shifted to blockchain, the technology that underpins those digital currencies.
With blockchain, information is stored in so-called 'blocks' that are verified against each other, in effect providing a ledger for all digital transactions.
Like artificial intelligence, virtual reality, analytics, and the Internet of Things, blockchain technology is still in its relative infancy, but it's already playing a pivotal role in the enterprise digital revolution.
Thousands of Blockchain apps are currently in development and enterprises worldwide are adopting pilot programs that also run into the thousands.
In fact, many tech industry analysts consider blockchain to be an ideal accompaniment to those technologies, and it is widely expected to become dominant within enterprise IT infrastructures in the near future, capturing a large slice of the US$500 billion global enterprise software market.
Who stands to gain?
The potential benefits for enterprises are obvious; by creating an unbreakable chain of transactions, blockchain can:
reduce the cost and time of transactions
greatly improve transaction and system security (reducing the chances of fraud)
provide infinitely greater transparency
deal directly with customers without having to deal with intermediaries.
This means greater process verification and auditing, smarter data storage and usage, and vastly improved supply chain and product life-cycle management.
Such process verification could, for example, do away with the need for constantly regurgitating identity information whenever opening a bank account, applying for a loan or credit card, or just purchasing a product off a website for the first time.
Any industry that would benefit from secure centralised information storage and lightning-fast transactions can benefit from adopting blockchain technology.
For example, finance, insurance, health, medicine and manufacturing businesses are prime candidates to benefit from a whole range of blockchain functions across public and private ecosystems.
Yet unlike public blockchains such as Bitcoin and Ethereum that store data in a way that is readily accessible to everyone (making transparency one of their big selling points), enterprises will increasingly come to rely on private blockchains that can encrypt transactions, guaranteeing users’ anonymity when required while simultaneously reducing the threat of data falling into the hands of the competition.
Blockchain frameworks, protocols, and regulations may still be in their formative stages, but there are noted consortia working on these with the full backing and financial support of the world’s largest IT and financial companies.
A good case in point is the Enterprise Ethereum Alliance, which has 500 global members including Cisco, Microsoft, Accenture, Intel, HP, JP Morgan, Pfizer, and Samsung. The future may be uncertain but with so many benefits to be had, and with so many heavyweight players getting involved, we can be sure that blockchain is here to stay.