Since its launch in 2009, everyone is talking about blockchain technology. Businesses are finding themselves under immense pressure to keep up with this new technology and avoid being left behind. In a survey conducted by PwC last year, 84% of executives surveyed (out of 600 in total) said their companies were already actively involved in exploring the opportunities offered by blockchain.
So, what is blockchain technology? Is it just for FinTech and Banking, or are other verticals set to benefit from this new technology? How could your business transform essential processes by using blockchain technology?
WHAT IS BLOCKCHAIN TECHNOLOGY?
Blockchain technology uses a distributed ledger. There is no single copy of the ledger. Blockchain blocks are held on a network of computers, and because there is no single master copy, it’s extremely hard to change or manipulate the data held.
Changing the data held in a block doesn’t replace that block, it creates a new one with a new identifier. This is the appeal of blockchain.
The blocks each contain three types of information:
Date, time and value
Parties to the transaction
A hash that identifies it from other blocks in the chain.
Each block stores many transactions and is only added to the chain once a transaction has occurred and been verified and stored. The block is given its unique identity called a hash. Once it has been added to the chain it becomes public, accessible by anyone and unchangeable.
Blockchain users can choose to connect their customers to the blockchain network which means their computer receives a copy of the updated blockchain every time its updated. There are thousands, or even millions of copies of the blockchain on computers across the world. To change data held in blockchain, a hacker would need to manipulate each and every system in a chain simultaneously to be able to change existing ledger entries. This is what gives blockchain its impressive reliability.
SO, WHAT DOES BLOCKCHAIN TECHNOLOGY MEAN FOR BUSINESS?
Business is likely to speed up
Blockchain and finance are the perfect match. Blockchain’s ability to record data in a manner that cannot be tampered with is hugely enticing to banks. Especially when you consider that banks are only open 5 days a week during working hours. That creates unavoidable delays in the processing and movement of funds. For the odd £20 cheque, this isn’t a big deal, but for substantial transactions these hours can make a dramatic difference. Blockchain removes these limitations, enabling businesses to trade securely 24/7.
Currency fluctuations will carry less significance, opening up international trade
Bitcoin is a currency developed using blockchain technology. Not only does the use of bitcoin reduce transaction and processing fees but it offers businesses, in countries where currency is unstable, an alternative secure way to invest. This removes the risks and uncertainty inherent in local market currency changes.
Data management and transfer
With the use of a private key, medical records or personal data can be stored securely using blockchain. The private key ensures that only those permitted to access the data can actually access the data, but the distributed ledger technology ensures the reliability and integrity of the data. This would work for personal data, property and land ownership, academic qualifications and even personal financial data. In fact, the options are literally endless.
Now, this is one of the most mind-blowing applications of blockchain. Contracts can be coded to require a series of conditions to be met before exchange takes place. Once those conditions are satisfied, the contract, using blockchain technology, can automatically release information, or transfer funds or property. This removes the need for notary publics, the opportunity for human error and delays to the business that result from globalisation, by providing a reliable real-time exchange environment.
Authenticity of materials
Another way in which blockchain can change businesses is by providing assurance as to the authenticity of foods and materials as they move through the supply chain. This can help to control labels such as organic, kosher certifications and locality claims. Because the data cannot be tampered with, blockchain can be used to guarantee the integrity of certification and testing throughout the supply chain.
There are many more ways in which blockchain can and will go on to transform businesses. These applications are only the tip of the iceberg and, as technology evolves, blockchain will become heavily integrated in businesses to create a more reliable, faster and secure process for many businesses.
If you would like to discuss this or any of our current roles, please contact me Daniel Evans – Daniel.firstname.lastname@example.org