I recently read the Harvard Business Review article “The Impact of the Blockchain Technology Goes Beyond Financial Services“. There is a buzz in financial services around blockchain technology, and the impact it will have on the industry. So this article caught my eye since it was talking about blockchain technology outside of finance, and since it is by the folks at Harvard I’m thinking its going to be less hype and more fact. By the way, I’ve never been to, or near, Harvard 😉
I made the following notes as i read through the article:
1. Forget Big Data, the Cloud, Social Media.. Blockchain Technology is the one to watch
While other technologies will impact business over the next decade, blockchain technology according to the Harvard Business Review (HBR) will change it. Why?
- Blockchain technology is a global database (distributed ledger) running on millions of devices and available to anyone
- Anything – money, title, deeds, music, art….. – can be securely transferred and stored using blockchain technology
- Trust is not maintained by single and central bodies, but by the network, collaboration and complex algorithms
- The above enables blockchain technology to move and store value in a simpler, fast and cheaper way
The internet is described as the first natural digital channel for information, and blockchain as “the first native digital medium for value”.
2. Blockchain could lower transaction costs
Okay, so i would stress the word could! But in short the belief is that transactions costs will fall because:
- A global and searchable database means you dont have to rely on multiple organisations in any given process
- You dont need people and processes to monitor and coordinate complex business rules
- Smart contracts (computer programs that automate contract instructions) and autonomous agents (multiple smart contracts which conduct many transactions, or multiple processes within a transaction) on the blockchain will remove the need for multiple agencies and in turn simplify and speed up processes
- Again trust is collaboratively managed by the network and not enforced by centralised institutions
3. Blockchain Technology can Protect IP – Information Protection
With the internet musicians, photographers, artists and scientists (to name a few groups) were arguably not appropriately paid for their talents. Intermediaries such as record labels, studios and educational institutes consumed some (in some cases a large proportion) of the income these groups earned. Worse still, in some instances, their intellectual property was illegally copied (pirated) and shared over the web.
With blockchain technology these creators can register, authenticate, own and transfer the intellectual property (music, photos, artwork, science papers) as they deem fit and ensure that their works are not duplicated. The individual can receive payments directly, rather than having to rely on intermediaries.
4. Blockchain Technology and the Sharing Economy – Disrupting the disruptors
Many of the sharing-economy companies such as Amazon, Uber, Airbnb and eBay essentially provide a central platform for individuals to come together and offer and sell their services. These companies are in short middlemen who make their money through the fee they charge their users.
Using blockchain technology there is the potential to create a true sharing economy. One where there is no need for middlemen, where individuals within the network can connect with one another directly, securely and much more cheaply.
5. Revolutionising Manufacturing
3D printing is a huge topic in its own right, and will change the face of manufacturing by moving it much closer to its end users. This will in itself revolutionise manufacturing, but one of the concerns is how to protect the IP (intellectual property) of the product and the required materials. Blockchain technology, please stand up. Blockchain can allow holders of the rights to store information about any substances and materials on the distributed ledger network and thereby protect the IP.
For further information read: ICTSD: Death of the power house? 3D printing, blockchain, and trade negotiations
6. The Internet of Things will result in the Internet of Everything, which needs a Ledger of Everything
And those billions, even trillions of transactions can be managed by blockchains. I think that pretty much sums it up, eh?
For further information read: ReadWrite: Will the blockchain help unlock the IoT revolution?, CIO: Beyond bitcoin: Can the blockchain power industrial IoT? and Information Age: How blockchain will defend the Internet of Things
7. Collaborative Networks
Alright, i must admit i didnt know what this was referring to. So the first thing i did was to find out about collaboration tools. Basically they’re talking about software and networks that allow employees to share documents, workflows and ideas across an organisation so that people work more effectively together. With that in mind, the opportunity for blockchain technology is to replace the plethora of social network companies and allow employees to own and better control their profile data.
I’m going to do a bit more reading on this, and will probably start with the following: Microsoft Azure: Blockchain: the catalyst for a collaborative economy and Digital Transformation: Why Microsoft is Interested in Blockchains
I’m still trying to get my head around this blockchain technology stuff so if i have misstated anything above, please let me know in the comments below – Thanks!