Industry estimates blockchain will generate $3.1 trillion in new business value by 2030*, but organizations should start exploring the technology now as it is set to be ready for more mainstream adoption by 2023.
Larger, multinational companies are leading the way so they can have a more efficient process through documenting transactions to a more secure process to exchange commerce; and it is growing into other operations. Organizations that have laid the groundwork to utilize and implement the technology will be in a better position to differentiate and more effectively compete.
For CIOs, it’s necessary to understand what blockchain is and how it works, and more importantly, how the technology can be utilized to further business priorities and growth.
What is blockchain?
A block is digital record of a new transaction. When a block is completed, it’s added to the chain. The crypto-currency transaction is done without a middle man — you don’t need a bank to verify the transfer of money or take a cut of the transaction. The information is constantly reconciled into the database, which is stored in multiple locations and updated instantly. That means the records are public and verifiable. Since there is no central location, it harder to hack since the info exists simultaneously in millions of places.
Elements of Blockchain?
True blockchain has five elements: distribution, encryption, immutability, tokenization and decentralization.
Distribution: Blockchain participants are connected on a network and has access to a copy of a ledger that updates with new transactions occurs.
Encryption: The participants can control their identity and other personal information and share only what they need to in a transaction.
Immutability: Records cannot be corrupted or otherwise changed unless the participants agree on the need to do so. Each record is cryptographically signed and time-stamped.
Tokenization: Tokens can represent the value of the asset being traded and can be anything from financial currency, data or physical assets.
Decentralization: Decentralization means that no single entity controls all the computers, the information or dictates the rules.
Most early blockchain solutions lack the elements of tokenization and decentralization. CIOs must understand the difference between real and partial solutions and invest in those that offer true benefits.
Future of Blockchain
In the financial services industry, blockchain opens up opportunities for cross-border or international payments, trade finance, securities settlement efficiency and more secure identity systems.
Besides financial, it is starting to expand into other industries. For supply chains, the initial applications range from the ability to track a mango from farm to store or proving the authenticity of an object from factory to store. An organization can use it to enable a higher level of accountability and ability to measure the real impact of policies. One county in Utah is using blockchain for its municipal elections. The power of managing records makes it very versatile and more efficient for many industries.
To give you an idea of how seriously it’s been studied and adopted, IBM has 1,000 employees working on blockchain-powered projects. They’ve also set aside $200 million for development. Financial and tech firms invested an estimate $1.4 billion dollars in blockchain in 2016 with an increase to $2.1 billion dollars in 2018.
We are inviting CIOs, CTOs and CISO to attend the first in a series of blockchain events on Nov. 6th from 8:00-11:00AM with an overview to blockchain, the economics of it and hear about case studies to determine if blockchain is right for your organization. The second of the series is an invitation for the person in your organization that would be in charge of the blockchain implementation. Then, the third and fourth in the series are trainings for the developers who will be responsible for coding your blockchain application. To register go to: https://www.eventbrite.com/e/blockchain-for-cios-tickets-74496512073