There’s plenty blockchain banter out there. For many, one question still remains: How can it actually help my business?
Below we aim to answer this question, covering some basics on blockchain technology, some ways businesses are benefiting, and some tips to help you get off on the right foot.
Let’s start with the definition: A blockchain is an open, distributed ledger that can record transactions between two parties in a verifiable and permanent way. Each transaction can be thought of in the form of a ‘block’ — all of which are linked together to form the chain. Each block is recorded, time-stamped, and cannot be retroactively altered unless there is consensus by all members. Blockchains are increasingly being used for record-keeping and transaction-oriented processes.
Blockchains come in different shapes and sizes, and can be created by anyone. The most common types:
- Public — Open to anyone with no access restrictions. Anyone can send transactions and participate in the execution of a consensus protocol. The most common examples are the cryptocurrency Bitcoin, and Ethereum, an open-source, blockchain-based distributed computing platform and operating system.
- Private — Unlike open public blockchains, private blockchains are restricted and cannot be joined unless you’re invited by the network’s administrators – usually all from a single organization. For example, private blockchains are typically used by enterprises getting started in blockchain as they offer more control over who accesses it vs. a public blockchain.
- Consortium or Federated — Similar to a private blockchain in terms of restricted access, consortium blockchains can include multiple organizations or partners who conduct transactions on the blockchain based on the consensus protocol. Access is usually limited and reading rights can be restricted by the blockchain’s administrators.
Now, let’s take a deeper dive. The Harvard Business Review Whiteboard Session video below answers key blockchain questions, including how it works, why you should care, and how it can apply to your business.
You can watch the HBR video here.
Are you ready?
Below are some additional tips to help ensure your blockchain initiative delivers business results for your company:
- Find the Use Case First — No matter who you talk to, getting your blockchain use case identified and defined should be your first step. By establishing a business need and use case, you’ll have a guiding principle to keep an often unpredictable initiative on track.
- Work with a Partner or SI with Expertise — Working with experts that have knowledge and experience on how to best apply a blockchain to your business can increase your rate of success and speed the process to get there. From use case best practices to solution recommendations, the right blockchain collaborator can help ensure your are getting value from your blockchain initiative.
- Make Sure Your Market is Ready — Not surprisingly, blockchain is getting the most traction in heavily transaction-based businesses, including financial services, energy, healthcare, and the public sector. In these industries, especially in emerging developed countries around the world, blockchain provides the opportunity for companies to ‘leapfrog’ current business models and competitors in the market.
Don’t miss out on the blockchain opportunity. Applied correctly, the technology provides a huge opportunity to drive greater efficiencies and cost savings in the near term, while opening your company up to a broader ecosystem for growth in the future.