I recently attended the 3rd Annual Blockchain Conference in Chicago. Many of the discussions focused on Bitcoin, the well-known digital currency, and 2017’s turbulent initial coin offerings (ICOs). From a JDK perspective, I was interested in learning how early stage and mature companies are leveraging private blockchain implementations. With the rise in popularity of Bitcoin, blockchain, the underlying technology of digital currencies, has garnered interest across industries, with companies strategizing how to leverage its potential.
What is blockchain technology?
Blockchain is a decentralized, distributed public ledger of transactions that can be inspected by every participant of that transaction. It allows data to be recorded in a permanent, secure, and immutable, or inalterable, way. The data is not centrally owned and standardized. Rather, each party has a replicated copy of the ledger which is accurate and updated with subsequent transactions in near real time. With blockchain, anything of value can be exchanged with another item, and shared with all parties in an accurate and trusted way.
Are you considering blockchain for your company? Here are 3 uses cases to consider first.
1) Will it meet your business and customer’s needs?
When there are numerous players holding various degrees of market power in a high-stakes transaction, blockchain can be the best technology to make the transaction, secure, transparent, and trusted. For example, when a consumer is buying a home there are sellers, buyers, agents, lenders, lawyers, inspectors, government entities and more. In this case, title companies serve as the intermediaries responsible for mitigating risk and standardizing transaction data. In this scenario, blockchain technology could be used to authenticate identity, verify income, validate inspections, manage data and more, reducing the time to close, and potentially making obsolete the role of the intermediary.
Smart contracts can also be very useful in these types of transactions. They are programs coded to execute when certain conditions are met. In the example of buying or selling a home, a simple contract might automatically notify agents the results of a home inspection.
If your business and your customers transact in a network of multiple parties, with limited trust layered with contracts, lawyers, and audits, Blockchain may be the technology you’ve been looking for.
2) What difference will blockchain make in my business?
If your company depends on a multitude of partnerships and vendor relationships to produce a product or service, blockchain can enhance trust and accuracy at every point of transaction. These capabilities have the potential to remove intermediaries, act faster, and slash costs.
3) Blockchain technology is powerful. But is it the best tool for the job?
Blockchain can be viewed as a trust machine where multitudes of entities or people virtually unknown to each other, are exchanging items of value. For two business partners with a longstanding relationship built on trust, blockchain may not make sense to manage transactions. In this use case, trust between the players is high and information sharing is generally accurate and dependable.