If you have heard about blockchain, it was probably in the context of Bitcoin, or some other cryptocurrency. You may have considered it a sort of risky investment for nerds. But blockchain is way more than that. Its unique characteristics make it the perfect tool for several industries…which are now starting to wake up to this fact.
What are the fundamentals of blockchain technology?
First and foremost, decentralization. While a traditional approach records all transactions in one central database, blockchain does the exact opposite. All the data is stored in a P2P network, accessible to everyone who is using it. There is no central point of failure, no authority.
Each block contains a hashed (encrypted) version of the entire chain that came before, and the most recent transactions that were added to it by the users. When the block is completed, it is similarly hashed and passed on to the next one. This is how the main chain grows.
The cryptographic method used on the blockchain is a hash algorithm that creates a string of a fixed length of any and all data added as an input. The same input will always yield the same output, but even the most minuscule change will lead to a change in the output.
This means two things: since the content of blocks cannot be decrypted, it remains confidential, and that by releasing the output to all the users, you can use them as proof that the input hasn’t been changed. This makes the blockchain decentralized, confidential, and immutable.
This is all a cool concept, but…
How does it translate to real life?
The first industry that recognized the benefits of blockchain was the financial industry. This was served to them on a silver platter of course, since the first mainstream application of blockchain was Bitcoin, a cryptocurrency that still dominates this sphere. The first use case for blockchain was exchanging value (cryptocurrency for goods and services) between two parties, where the security built into the system made it unnecessary to have trust in each other, and also to have a central authority overseeing the transaction.
However, the trust and value inherent in blockchain technology will be useful in a number of other areas, as well. Smart contracts were the next step, where the value exchanged was not necessarily financial. It’s basically a promise, guaranteed by the blockchain, essentially a digital “no backsies”.
Enterprise blockchain is again a step away, as the relationship between the parties is no longer a one-on-one, but instead, one-to-many: one enterprise providing goods and services to many customers, who can check the company’s claims on the blockchain. Building trust with your clients is one of the collateral benefits of this technology.
Some very practical advantages are traceability and automation. All the recorded data are immutably stored on the blockchain and accessible to all authorized parties. This eliminates the need for third party supervision, speeds up processes and, ultimately, saves cost.
What enterprise blockchain applications are possible?
Blockchain is not suited for every single industry and application. It is a tool, and it has its place where data should be stored immutably. It is not possible to update or delete data from the blockchain, which should be taken into account when deciding to adopt.
There are several industries where blockchain makes sense. The following applications already exist, and many others are being considered.
Supply chain tracking
Your entire supply chain can automatically be registered on the blockchain, making it accessible to your company and customers alike. That way, if there is a problem with a given batch (think food, cars etc.), it takes no time at all to reliably establish where it could have gone wrong, and where you can intervene to handle the incident.
Some notable examples include GE’s additive technologies, where certain 3D-printed elements are traced on the blockchain. This ensures that critical and precise parts (such as a fuel nozzle for a jet engine) are correctly manufactured.
Ocean Mist Farms is using GS1 US standardized technology to record data from the field until arrival in the supermarket and to display it on one, easily readable label.
The Norwegian Seafood Association, in cooperation with IBM and Atea, designed a blockchain-based solution to track the origin of their farmed salmon, to assure consumers that what they are sold is actually Norwegian salmon.
Tradelens is another standardization initiative of IBM and Mærsk. Container vessels’ shipping events, together with sensor-supplied data about temperature, weight etc. are recorded on the blockchain.
Media
Artists and other content creators have traditionally been in a weak position compared to production companies, often unaware of where and how their work was used or consumed, and, consequently, not getting paid fairly. This could change by cutting out middlemen and recording all digital media consumption on the blockchain and by allowing artists and fans to connect directly, as explained by Crypto Media Hub CEO Tatiana Moroz in this 2016 interview.
Healthcare
Patients are often treated in several institutions over the course of their lives. Due to data protection rules, health-related information often remains in silos instead of being shared with the next doctor, who could treat the patient better if he had access to it.
Blockchain could create a single identity for each person, allowing them full control over their own data.
As the COVID lockdowns are slowly relaxed all over the world, it becomes more and more important to be able to trace travelers and their contacts. However, people are rightfully afraid of their data being misused. Blockchain technology can be used for tracking people’s movements and collating data without compromising privacy.
Where are we right now?
According to a Deloitte survey, 55% of C-level executives over several industries look at blockchain as one of their top priorities. An astonishing number of large companies are creating consortia to operate a shared ledger, and those who are trying to remain on the sidelines are risking being left behind.
When it comes to blockchain, we are edging past the early adopter phase, and blockchain is gearing up for massive growth in 2020 and beyond. Now is the time to consider blockchain for your enterprise, and to join the new industrial revolution.
If you find the world of enterprise blockchain as fascinating as we do, check out this The Tatiana Show episode, in which BlockSpaces founder Rosa Shores and CTO Chris Tyler discuss this space in depth!