Finding the real value in blockchain
- Posted on March 8, 2018
- Estimated reading time 3 minutes
This article was originally written by Avanade alumn Sanjay Marwaha alongside Aaron Reich.For most people, the term blockchain is synonymous with bitcoin. As bitcoin and other cryptocurrencies have been overhyped, people are quick to dismiss blockchain as well.
People who underestimate the potential of blockchain may be the same naysayers who believed no one would ever trust the cloud. If you’re one of them, you’re not alone. According to Avanade research, 83% of senior business and IT executives agree that blockchain will ultimately be more of a fad than a revolutionary technology.
One reason people may be quick to lump blockchain in with cryptocurrency and consider it all a flash in the pan is that blockchain can be tough to grasp – and many people find that hard to admit. We found that 80% of executives are confident they fully understand the meaning of blockchain technology. However, 91% cannot accurately identify an example of it.
Bigger than bitcoin
While the rise and fall of cryptocurrency seems to be attracting all the attention around blockchain, innovators are using the technology to address some big business and societal issues. For example, Avanade is part of a global consortium that is using blockchain to develop a digital identity that can be wholly under the user’s control, providing a formal and auditable identification to the one-sixth of the planet currently without it. ID2020 will give people access to government services, education, voting, refugee tracking, and enable them to claim a legitimate and unique place in the world.
Blockchain is helping entertainers maintain control of their own products and ensure they get paid through decentralized digital rights management.
With blockchain, grocery distributors can track pork from the farm to table, ensuring food safety practices are upheld every step of the way.
The blockchain paradigm is not really about technology. Our initial conversations with clients focus on the identification of business processes that can be transformed by reimagining how each interaction should occur. When we get behind the curtain, we see that so many of our daily transactions involve trust between the parties and agreeing on a version of the truth: Blockchain is changing this.
Tapping into blockchain
The technology behind blockchain is nothing new – the algorithms and infrastructure have been around for a while. What’s new is the way the technology works and the lower barriers to entry that cloud offers in terms of availability and cost. Additionally, this is the right time for blockchain as we accept the notion that running a successful enterprise is more about what you do than what you own. Assets no longer have to be centralized to deliver value – just look at a car rental or taxi company versus Uber, or a hotel chain compared to Airbnb.
As we become more comfortable with decentralized services, we also become more open to decentralized information. Rather than having a country own all the land transfer records centrally, blockchain can encrypt and replicate those records more broadly, eliminating fraud or loss.
Where to apply blockchain
With technology that has the potential to transform services, the learning curve is bound to be fast and steep. But you don’t need to fully understand how blockchain works – you just need to know how it can work for you. You can begin by asking:
• Can my interactions with other firms benefit from us both relying on a single version of the truth?
• Am I burdened by slow and cumbersome processes?
• Is compliance a big part of my operation?
If the answer to any of these questions is yes, then blockchain might add value. Real value – not the kind that fluctuates daily and has governments, businesses and individuals shaking their heads.