Blockchain is No Longer a Buzzword By Jason Bennick
The argument that blockchain is just a buzz-worthy fad is no longer a battle cry by its loudest critics. As we roll into 2021 from an ongoing pandemic, it’s pretty easy to find many Fortune 500 companies and household name businesses putting blockchain to good use. Many have already deployed solutions they’re using to make a measurable difference in how they do business, bringing us as consumers a better experience.
To understand the use of blockchain in business and the rationales behind this shift at the enterprise level, I wanted to touch on a few of the major footholds that seem to have now become a foundation for value. While I could write for days on the processes involved in deciding to use blockchain or not, here are what can be identified as core qualities where blockchain moves from just a buzzword to actual problem-solving.
Blockchain is a powerful technology of choice for validating the source. If you want to know for sure your coffee beans, green beans, sardines, or blue jeans are organic, natural or not, or produced through human trafficking, blockchain can best solve that. Traceability of manufacturing from birth to expiration of material goods, food, or even energy, can be hashed on a shared decentralized ledger solution with immutable entries securely protected from alteration.
This linearity of travel into consumers’ hands can be visibly traced and tracked by providing users access based on roles and permissions. A powerful use-case currently impacting daily groceries and where we shop can be seen with Walmart Canada and DLT Labs™ using Hyperledger Fabric™. This case is a good study and something to consider for nearly any industry, such as automotive, marine, and aerospace.
Validation of who you say you are is fundamentally vital to prevent payment fraud, preventing unapproved access, and ensuring personal safety. We are so used to showing our driver’s license or passports. Still, at the rate hackers are phishing emails, digital signatures, and spoofing wire transfer information, we see hundreds of billions annually misdirected in payment fraud and growing.
Blockchain can be a very effective tool in solving immutable identify validation and providing a trusted method through secure access to prevent altering that information so personal identity stays protected and safely exchanged. “Decentralized Identity,” or DID, is quickly emerging as a sophisticated yet simple means of bypassing the need for conventionally storing, sharing passwords, or sensitive personally-identifying information. An encrypted version of your identity is kept on the blockchain, and your DID can then be used to securely transact digitally online and not worry about being hacked.
While there are dozens of use cases evident in the numerous companies currently providing DID services, IBM’s cool emerging solution at the alpha stage is their IBM Verify Credentials™. To get an idea of how DID works, IBM delivers a sandbox anyone can go in and build a decentralized identity application to open a bank account with a fictional “BigBlue Credit Union”.
Whether finance, legal, trade, or retail, automated smart contracts can solve saving millions and secure transactions in the billions. Smart contracts in blockchain simplify processes and actions, such as managing portfolio assets, by allowing agreements between parties to execute against predetermined business rules that have to be unanimously met across a series of nodes (computers) that each look for all rules criteria to be met before allowing that transaction to take place.
Here are just a handful of current examples of how smart contracts in a blockchain are being used:
- In insurance, blockchain’s encryption features can use smart contracts to oversee fraudulent or suspicious actions within an account while speeding up verification and claims processing.
- In entertainment, the blockchain ledger provides a visible and transparent transmission of royalties to all parties involved with the music creation. It also helps artists protect their creativity and claim royalties for their work.
- In healthcare, smart contracts provide coordinated and secure shareable transactional digital records for payers, providers, and drug manufacturers with pharmaceuticals and tying these into drug usage down to consumer level as part of secured shareable health records using blockchain.
A good, real-world example of how smart contracts are used today is with Propy™, a global real estate marketplace with a decentralized title registry system. The online marketplace uses blockchain to make title issuance instantaneous and even offers properties that can be purchased using cryptocurrency.
Determining Blockchain Use
McKinsey provides a really good analysis of how to compete using blockchain, namely in addressing how to optimize a blockchain strategy based on your own business market position. While the complete study can be found here, it is interesting to note how the best strategy for each use case is solved by market position and one’s ability to influence industry standards and regulatory barriers.
The study points out that blockchain has measurable strategic value for the business by enabling cost reduction and, in the longer term, creating new business models. Key to note is that existing digital infrastructure and growth of pre-packaged blockchain-as-a-service offerings have also lowered the costs of businesses testing blockchain and further help companies bridge the gap to adopt.
While all of us in technology realize blockchain is still at its nascent stage of emergence, it is already showcasing an ability to create greater transparency; fairness saves businesses time and money. And in so many ways, impacting our future from how contracts are enforced to making governments work more efficiently.
The Digital Innovation Group (DIG Holdings Inc.) is a GA Telesis™, LLC company, the leading provider of integrated services in the commercial aviation industry. DIG is a creative think tank and execution team charged with innovating business solutions using emerging technologies. Through the vision of a secure and connected world powered through ingenuity and democratized technology, DIG is making transformational technology accessible for every business. DIG is underway developing and introducing a series of innovative and connected business solutions helping drive transformational change in removing friction and improving business speed and viability.
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