What does blockchain mean for digital transformation?

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Every few years we are faced with a barrage of new technical jargon that become the must have darlings of technology in order to remain competitive. As competition heats up in the technology world, organisations must move their focus onto new areas of technology to drive digital transformation. Web 2.0, 3.0, Augmented Reality, Programmatic Advertising, Contextual Marketing, AWP, PWA and so on. Well, 2018 is by no means unique and has introduced a new wave of technical terms that you may feel you should aspire to have. Artificial Intelligence, Data lakes, Bots and of course the more recent kid on the block, BlockChain. Most of the newly introduced technologies are seemingly self-explanatory but one that I get asked to explain the most is Blockchain and what it means for Digital Transformation.

 Based on various recent studies, almost half of decision makers within a company feel that their current digital offering is out of date. Ninety-four per cent of companies say they have increased focus on their digital growth, while ninety per cent admit digital is central to the business achieving their business strategy. So far, over twenty-five per cent of business budgets have been invested in Blockchain and AI and that is set to grow significantly through 2018 to 2020. Blockchain holds immense promise for pushing transformation even further by eliminating the middleman from most business processes, manual and digital, as well as protecting almost anything—from finance, to music, document audits, to mortgage loans and digital wallets.

So, what does blockchain mean for digital transformation? The impact can be as significant as the browser was to the growth of the internet. 

A really exciting example where blockchain can prove transformative is in healthcare, where personal records need to be stored in a secure way but made available quickly when needed. Blockchain can revolutionise this process by securely keeping a record that is owned by the individual providing ID and permissions so only the relevant information is released to the right people at the right time. Decentralisation is the key, transforming the ownership and control to the individual. Think of the opportunities here!! Data marketing firms could be obsolete in 5 years. World aid can become far more slickly handled too. The UN World food programme sent more than 10,000 Syrian refugees cryptocurrency-based vouchers to purchase food enabled by blockchain technology. This eliminated the need for real money and all the issues that it brings with it when distributing in an area in need of help and support.

And then there’s transport and logistics. Blockchain could help streamline transport by pulling various shipment data and putting in one place. UPS have joined a group who are bringing blockchain to the shipping industry. BiTA is looking at how distributed ledgers could transform freight shipping. Distributed ledgers use blockchain technology to store and share linked data across several different computers. When data is added to the ledger from anywhere in the network, it’s made available to every other node too. For example, data on an individual shipment could be added to a centralised ledger and then updated by the parties involved throughout its transport. Carriers, customs approvals and insurance firms could all access the shipment data using the ledger, perform their role with it and then pass it on to the next party in the chain.

In a similar vein, the manufacturing supply chain is another space where blockchain can simplify complex and time critical functions – tracking components used in aeroplane manufacture from multiple locations, for example. Providing immutable and multiparty authentication of provenance and ownership of high-value items. It has also been used in diamond trading and art sales.

However, blockchain is not without its risks. While it can drive efficiencies and reduce costs, its peer to peer and distributed processing architecture can lead to unknown issues.  It can lead to significant disruption to services if there is no immediate manual over-ride or tried and tested solution that can be implemented quickly to keep the automation process moving as smoothly as expected. Blockchain could quickly become a flash in the pan.

Here are some businesses entering the market and are pushing the transformation envelope.

Digital identity

Blockpass are a digital self-sovereign identity, and their goal is to simplify the ‘know your customer’ (KYC) process that banks and other regulated institutions must undergo when they do business with individuals. Instead of leaving the companies in charge of the identities, the end-user remains in control (hence ‘self-sovereign’). Due to recent privacy scandals and thanks to blockchain’s unique capabilities, there is clearly a need for a new system such as this. 

Sports and fitness

Sweatcoin reached number one in the App Store and is a cryptocurrency that rewards physical exercise. By hooking into the smartphone’s health and fitness data and tracking the steps you take every day, Sweatcoin convert this effort into value – 1,000 steps equals .97 in “Sweatcoins” which users can then use to buy fitness gear, workout classes and gift cards. They have also enabled you to be able to pay your taxes through Sweatcoin, so theoretically you could exercise your way to a lower tax bill.

Social Impact

eduDAO provide a funding platform for the most underfunded education-related organisations while bringing people together to support and empower local communities to drive change in their neighbourhoods. Their platform connects non-profit funding and education using blockchain technology to achieve greater transparency in the donation system for the good of the community. 

Banking

Spain’s BBVA has become the first global bank to issue a loan using the distributed ledger technology that underpins cryptocurrencies and has the potential to revolutionise banking processes. BBVA said it carried out the entire process for a €75m corporate loan — from negotiating terms to signing the loan — on a mutually distributed ledger that kept both the bank and borrower up to date on the loan’s progress. The process cut the negotiation time for the loan from “days to hours” and BBVA hailed it as a “significant advance in the exploitation of [distributed ledger] technology”. Not just in banking but in the way private and public blockchains can interact.

So, with blockchain driving digital transformation across various industries, are we going to see a world without banks, without currency, without exchange fees and smart contracts, changed ownership of data, and more importantly, without the middle-man? Or, will the concerns about security, scalability and robustness see this as just a passing fad? Only time will tell! Though one thing is for sure, the way banks and businesses think about their digital future will never be the same again.

Chris Minas, Nimbletank
Image Credit: Zapp2Photo / Shutterstock