Does blockchain have a place in business?
The blockchain is something you’ve no doubt already come across, especially with the boom of Bitcoin over the past few years. In the simplest of terms, it’s a type of database that can be distributed and used to store ordered records in real-time. These are called blocks, and they’re usually time-stamped.
Normally this technology is associated with its crucial role as a public distributed ledger system in Bitcoin, one of the world’s most popular cryptocurrencies. Indeed, the blockchain only really started to become famed when it was conceptualised by the pseudonymous Satoshi Nakamoto in 2008.
However, since then, more use cases have come about. Because the blockchain is secure by design and decentralised in nature, it’s become an effective way of storing important, timely data such as names, medical records, financial transactions and identities.
While Blockchain technology is still in early stages and constantly evolving, there are many people who believe it has the potential to revolutionise business processes.
Blockchain’s limitless potential
The common stereotype surrounding the blockchain is that its only use is in Bitcoin, but that’s not the case. More businesses are exploring how the technology can help them streamline operations and internal processes, particularly when it comes to organising critical information.
Ruchika Mishra, security manager at WhiteHat Security, says the blockchain is changing the cards for storing, distributing and transacting data. In particular, she expects it to transform the financial industry over the next few years, ensuring institutions conduct transactions efficiently.
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“Despite blockchain technology underpinning cryptocurrencies like Bitcoin, the concept of a decentralised and cryptographically secured ledger has multiple business applications,” she explains. “Any ‘asset’ that can be stored, distributed or transacted – property titles, music, insurance and even personal data – could make use of blockchain technology.
“The technology shows great promise for improving the financial industry’s efficiency,” she adds. “For example, the three-day wait on ‘pending’ transactions could be eliminated if a distributed ledger were implemented. This is because a public registry, such as [the] blockchain, would remove the need for a central authority to verify the identities of all parties in the transaction. Settlement could then be instantaneous, since the transaction and settlement would happen simultaneously once the ledger is updated.”
Mishra can also see the blockchain having a positive impact on identity management, providing companies with a way to control who has access to valuable information and ensuring it’s protected from cybercriminals. This is something that’s crucial for firms, especially as the number of cyber attacks carried out each year is constantly increasing.
“An alternative business application is to use blockchain technology for identity management. As we go through our lives, each snippet of our digital identity is being collected to form a publicly obtainable digital profile of us. Blockchain technology could help us take control back over our virtual data: who has access to it and how much they can obtain. This could be a great leap forward for privacy protection,” she says.
Blockchain is an emerging technology and one that’s advancing rapidly, with people quickly realising the potential it offers. Sam Davies, lead technologist at UK tech industry growth organisation Digital Catapult, says the blockchain will grow immensely over the next decade. Many others also predict that in the 2020s, it’ll be an industry generating billions.
“The impact Blockchain will have on business over the next ten years will be transformational,” Davies tells me. “This distributed ledger technology will completely reimagine the way data and transactions are recorded and processed.
“Well-known for its applications in fintech, this disruptive technology is growing at an unprecedented rate with potential reaching far beyond finance. Gartner predicts that by 2022 a blockchain-based business will be worth $10 billion, and the technology itself will be established as the next revolution in transaction recording”.
Davies believes that as blockchain technology and solutions improve, it will become an integral part of the business world and Internet of Things (IoT) industry. “As the underlying blockchain infrastructure matures, businesses are presented with a great opportunity to implement increasingly automated and intelligent smart contracts.”
“This, for example, offers the potential to redefine what the IoT can deliver,” he adds. “By taking away the need for a centralised broker, the distributed, decentralised nature of IoT devices can be reflected in any underlying access, management or marketplace systems”.