Blockchain Solutions have the potential to disrupt businesses in a distributed and decentralized manner, creating blue ocean strategies for re-imaging and inventing new business models, while empowering institutions to achieve new growth opportunities. Blockchain is known widely for underpinning Bitcoin and other cryptocurrencies that are having a significant impact on the financial industry.
However, blockchain has the ability to be applied to multiple industries creating value propositions way beyond the financial world. Use cases for enterprises are generally not understood and many people are unable to see the potential for transforming business models with emerging technologies such as blockchain.
WHAT IS BLOCKCHAIN?
Although most associate blockchain with bitcoin as they are closely related, they are not the same thing. Blockchain is a distributed ledger data structure that can be applied to any industry that requires the transfer value. Bitcoin is built on a permissioned blockchain network, but it’s important to understand the full benefits blockchain can across a broad range of industries. Distributed ledger technology is known for creating
- Trustless transactions of value
- Immutable records
- Removal of intermediaries
- No central point authority
Blockchain is creating new possibilities and opening doors for transferring value with digital interaction that cannot even be imagined. Enterprises are seeing the potential upsides of impending blockchain such as streamlining systems and processes, reducing transaction costs, creating interoperability while gaining trust and transparency with their consumers. Learn more about what blockchain is and how it works, click here.
ENTERPRISES AND BLOCKCHAIN
Not all organizations need a blockchain solution, but for those who do the technology is becoming an essential part of the enterprise technology stack for streamlining business processes. Blockchains can help provide solutions for the following:
- Processing data Efficiently
- Creating trusted transactions on secure networks
- Managing digital assets
- Tracking ownership
- Voting applications
Enterprise blockchain solutions are generally assumed to be private networks, however, the visibility of the network depends on how it is governed. Although most enterprise blockchains are permissioned that does not mean they are completely private. Hyperledger is a good example of how an open-source community offers a suite of tools and frameworks to build enterprise blockchain solutions.
Market friction is an obstacle many enterprises face and are continuously working to overcome using technology innovation. Blockchain can help remove market friction and reduce inefficiencies. Recognizing the different types of market friction can help you understand how blockchain can help businesses. Let’s look at types of market friction
- When participants in a transaction don’t have access to all the same information there can be unfair advantages. In addition, some of the information may be incorrect or inconsistent resulting in delays or bad decision making.
- Not all information is made easily accessible to all participants in the transaction, leaving gaps of data not being collected.
- Protecting the information from cybercrimes and privacy concerns is a growing concern.
- When the cost of transactions is too high or the distance between parties is big.
- Transactions can take days or weeks to be processed which become very costly to manage via several intermediaries.
- Conditions that prevent a business from the ability to respond to market changes.
- Internal or external bureaucracy can delay the responsiveness
- Restriction to regulations can impact the ability to desired changes for the business
- Unknown or invisible threats, such as new business models created from new technologies. For example, Airbnb was an invisible threat to hotels.
Emerging technologies such as AI, machine learning and blockchain are creating new and exciting innovation opportunities for businesses to redesign their business and reduce market friction. Remember when the internet created business models that you never could have imagined, well blockchain is repeating history.
HOW CAN BUSINESSES USE BLOCKCHAIN SOLUTIONS?
The best way to understand how blockchain solutions can help businesses is to look at use cases across a wide range of industries. Let’s dive in and explore 8 uses cases for blockchain.
Blockchain-based transactions provide risk management mitigation, streamlined international transfers and improve financing processes for buyers, suppliers and financial institutions. Organizations can leverage smart contracts for transparent financial recording improving reducing auditing and assurance costs.
Smart contracts can be used from mortgages, land title registry to property management. Providing automated processing of payment and release of liens on properties while increasing visibility of records to all interested parties. Property transfers enabled through blockchain can reduce fraud, increase integrity and improve efficiency.
Currently, cross border payments are costly, time-consuming and often complicated and restrictive. With blockchain, transfers can occur instantly with no intermediaries or the fear of the transaction being manipulated. The benefits for business are faster payment processing, lower transaction cost and increased efficiency.
Insurance claims can be automated through smart contracts enabling IoT equipped vehicles to execute claims shortly after an accident. Policyholders receive increased savings by reducing work from verifying reports and policies.
Smart contracts can enable individuals to own and control their digital identity, providing the ability to choose what personal data is disclosed to counterparties. Increase security to protect from data breaches and reduce fraudulent activity.
Supply Chain Management
Supply chains are often very complex with multiple intermediaries, blockchain can provide visibility at every step of the supply chain eliminating traditional friction points. Interoperability with IoT devices can track a product from origin to final destination providing real-time visibility. EVERLEDGER is an excellent example of Australian based company using technology innovation for the supply chain management.
The current healthcare system needs more efficient and secure systems for managing medical records. Medical records are currently stored on centralized servers and access is limited to hospital networks and vulnerable to security breaches. Decentralized storage solutions provide a way to store complete medical history for each patient and the data be controlled by the patient and the parties they authorize.
Regardless of the use case, all smart contracts are deployed using a common language of code. It is very possible in a short period of time smart contracts will be adopted globally across industries automating systems and processes.
After identifying challenges and gaps within an organization’s innovation of technology, it’s important to determine which solutions are best suited for the business model. You might wonder what opportunities and challenges you might face when implementing a blockchain solution. Unfortunately, we cannot provide you with the answers in one article, but the good news is that there are many services that offer blockchain-based solutions and education providers to assist you with understanding the innovation of blockchain.
Interested in Learning about Blockchain?
For more information, visit Blockchain Collective who offer several recognized educational courses (the first of its kind in Australia), including an Advanced Diploma of Applied Blockchain, Diploma of Applied Blockchain and a six-week intensive course. The future is here. Will you be one of the first to harness the power of this technology?