Artificial intelligence, augmented reality, machine learning, Voice, IoT … of all the technologies forever altering life-as-we-know-it, there’s one that’s probably got greater potential for changing the world around us than all of these put together, and that’s blockchain. Bold claims indeed we hear you cry! But hang on a minute … isn’t blockchain relevant only in the financial sphere? While it’s a fact that most (if not all) of the world’s largest financial institutions – Morgan Stanely, Royal Bank of Scotland, Bank of England, Deutsche Börse, Federal Reserve System, JPMorgan & Credit Suisse, to name but a few – are using blockchain, the technology itself is about so much more than the stuff that makes the world go round. From streamlining supply chain management to enhancing patient-doctor interactions, sensor-enabled invoicing to tackling counterfeit goods, blockchain may just be the technology that’s going to change the way you do business, and we’re about to tell you why … Today we’re posing the question – is there a place for blockchain in your digital transformation?
“The blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.” William Mougayar, Author, Blockchain thinker, influencer
According to the IDC, worldwide spending on blockchain solutions was forecast to be nudging $3bn this year. Of course, giving these kinds of figures any real meaning is always problematic, but when you consider that figure is an increase of nearly 90% on the $1.5 billion spent last year, and, that a predicted nearly one-third of the world’s manufacturers and retailers will have deployed blockchain services by 2025, then perhaps it’s worth asking; is there a place for blockchain in your business?
What exactly is blockchain?
To get an idea of where blockchain could add value to an enterprise, we need to get to grips with what it is and how it works. In the simplest terms, blockchain is a digital record, a ‘diary’ if you will, and one that’s practically impossible to falsify. While this sounds kind of unimpressive at first, a closer look reveals the very opposite.
Imagine that you want to move money from your bank account to your supplier’s account. Traditionally, you’d need to first contact your bank to request a transfer, then the bank would move the funds from your account to your supplier’s account, with the bank keeping a record on register of the transactions – one to record the money coming out of your account, and the other to record the money going in to your supplier’s account. So far so normal, right? Except this way of doing things leaves the doors wide open to tampering because these transaction records can be easily changed or manipulated. And that’s where blockchain comes in – the technology that makes transactions both secure and anonymous.
Blockchain is basically a distributed database, or ledger, that’s shared over a large network. On each of the network’s computers, there’s a copy of this shared ledger, or a ‘block’, and each block on this chain is a bit of data which is encrypted. Each block on the chain needs numerous protocols before it’s validated, requiring permission from other blocks before it can be added to the chain. In short, this complex, encrypted model means that the chain of blocks has no single point of failure – in other words, the chain is unhackable. But there’s more – blockchain trumps the traditional transactions process in many ways:
- It’s Peer-To-Peer so there’s no central authority that’s able to control or manipulate the information in the blockchain … every blockchain participant communicates with the other directly, allowing for the direct exchange of info.
- It’s distributed, which means the chain of data is spread across a wide network. This makes tampering almost impossible.
- Information can only be added in the blockchain in time-sequential order. This means that once it’s added to the blockchain, it is almost impossible to alter. In other words, it’s practically immutable. We could say that it has …
- Consensus – the most critical attribute of all. The ability to update the ledger via consensus is what gives blockchain its decentralised model, taking control out of the hands of one central authority and putting it back into the hands of everyone involved.
The key benefits of this decentralisation are:
- Greater transparency
- Better traceability
- Improved security
- Greater efficiencies and speed
- Reduced costs
Sounds good right? It is. In fact, it’s so good, that just about any business worth its salt is, at this very moment, looking at where blockchain might fit into their plans for growth, expansion and longevity. Let’s dive a bit further.
So what can blockchain offer my business?
Until recently, blockchain was known most commonly thought of as a method of creating digital currency – Bitcoin being the example that comes to mind for almost everyone. But the times they are a-changin’. Across all industries, businesses are busy exploring how blockchain can drive their digital transformation, rewriting the rules of how they do business, and leaving tradition behind to forge a better, more transparent, more trustworthy ways of operating.
Many are already reaping significant rewards, including greater transparency, increased security, enhanced traceability, streamlined efficiencies and reduced spend – and many of their customers, in turn, are finding themselves empowered consumers with new, relevant insights into who they’re doing business with. So what’s blockchain bringing to industry? Is there a place for it in your business model?
Blockchain innovations – by industry
Blockchain in Finance
The financial services industry has been surprisingly quick to embrace the technology that will drive change and bring the sector into the future. Through blockchain, the financial enterprise can operate quicker, more efficiently and more resourcefully than institutional custom has allowed them to – and it’s for these reasons that many financial stalwarts have been quick on the blockchain uptake. For those willing to dip their toes in the waters, financial innovators are completely rewriting the sector rulebook – one from which there will be no going back.
- Blockchain benefits for finance
- Instant settlements
- Enhanced transparency
- Reduced risk and spend
- Optimised security
- Improved performance (and that’s just the tip of the benefits iceberg), any financial enterprise that’s serious about growth and being a contender long-term will surely be looking to blockchain as part of their digital transformation – here are a few innovations across the finance space that have caught our eye:
Finance innovators using blockchain:
Pledgecamp’s motivation? To “create the most open and trusted crowdfunding ecosystem”. Essentially addressing the key pain points in the usual crowdfunding model of trust and accountability, this so-called “Crowdfunding 2.0” platform, Pledgecamp, is a decentralised, secure and transparent framework for crowdfunding, created with blockchain-driven escrow functionality and token-incentivised user engagement. Goldman Sachs Research has already referred to it as “a $1.2 trillion opportunity over time”, so expect to see more movers and shakers in the blockchain/crowdfunding space very, very soon …
Lendoit, the world’s first peer-to-peer lending platform is, as you’d expect with a blockchain service, 100% decentralized. Marketplace lending of this kind is currently estimated to be touching nearly$290 billion by the end of play next year, and it’s easy to see why. Smart Contracts, anonymous and decentralised, Lendoit is blockchain technology driving trust and security across the lending process and rewriting the credit rules for an audience hungry for a different way of borrowing.
OpenDoor – “Sell your home the minute you’re ready”, is OpenDoor’s call to the wild, and with a substantial chunk of investment, it’s making big inroads into changing the property market model for good. OpenDoor uses data and algorithms to value and buy homes, delivering funds to the seller in days, not the usual weeks or months. Homes can be listed instantly and offers made in a matter of minutes, completing deals in record time, all courtesy of Blockchain.
Blockchain in Healthcare
The global blockchain-in-healthcare sector is predicted to reach a value of $5.61 billion by 2025 – pretty healthy by anyone’s standards, but then the benefits that blockchain will herald in across the industry are manifold. Every industry comes with its own set of issues unique to its ecosystem. Mountains of highly sensitive data, complex communications across patients, health providers, doctors and hospitals, ever-increasing costs, and labyrinthine purchasing processes are just a few of the many challenges facing healthcare today. But they’re also areas where blockchain can help, transforming the sector and putting the patient back at the centre of its raison d’etre.
Blockchain benefits for healthcare:
- Increased Data integrity of patients
- Gives patients full ownership over their medical data
- Enhanced traceability of drugs
- Improved tracking of services
- Greater security around sensitive data sharing
- Streamlined sourcing, procurement and billing
Healthcare innovators using blockchain:
SimplyVital Health – Around for a couple of years now, SimplyVital Health uses blockchain in ways that are wholeheartedly disrupting the healthcare space. ConnectingCare uses “care coordination and financial forecasting to help providers in bundled payments get insight into what happens to patients when they leave the hospital”, insights that are helping healthcare organisations not only deliver more targeted, relevant care but crucially allowing them to accurately calculate the cost of that care over the treatment lifecycle. It’s the innovative streamlining of sensitive data to save time and money through the use of a trustworthy, secure and immutable audit trail. Everything a healthcare professional would want to see when working both with super-sensitive patient data and financial information.
MedRec: As patients move between healthcare providers, their data often becomes dispersed across multiple locations, making access to historical health records often difficult, time-consuming and in many cases, impossible. Add blockchain to the mix, however, and you’ve got accessible, transparent personal healthcare data that’s smart-contract-based, pulling data into one location, fully decentralising access rights and putting control over their information back in patient hands.
BurstIQ – just the other day awarded $5.5m in investment, BurstIQ boasts the credentials of “first and only blockchain company to provide secure, HIPAA-compliant blockchain platform services for on-chain data management, complex data ownership, and granular consent”. So far, so impressive … and already, global enterprises, startups and government agencies are using the blockchain-powered platform to streamline identity services, care coordination, secure data access management, data marketplace access and much, much more.
Blockchain in Oil & Gas
According to the WEF, digital transformation in the Oil and Gas industry has the potential to unlock close to $1.6 trillion for the industry, its customers and society as a whole. The oil and gas industry is no stranger to emerging technologies and the opportunities that they bring to the table. From AR to AI, and everything else in between, there’s no lack of will when it comes to this sector embracing change – you can jump over here to read more about these operational innovations – however, when it comes to the more behind-the-scenes activities, things have moved somewhat slower than many would like to have seen. Supply chain management, trading operations and the multitudinous procurement and the myriad financial processes that drive the industry are as complex and as vast as they come, and bring with them countless issues around transparency, efficiency, and optimisation …
The good news is that blockchain has begun to address this, making tentative steps across many of the key areas that are crying out for these efficiencies and refinements that it can provide, and at the same time, delivering the endurance needed for profitability and growth.
Blockchain benefits for Oil & Gas:
- Provenance tracing for authenticity and quality control
- Streamlining financial reconciliations
- Enabling performance-based contracts
- Enhanced supply chain transparency
- Increased transaction visibility
- Reducing overheads
- Increased waste management and recycling
Oil and gas innovators using blockchain:
Ondiflo is transforming the traditional oilfield transaction from inefficient, time-consuming and highly costly paper-based execution to something as quick, easy and simple as paying for your coffee with your contactless card. Ondiflo, disruptor-extraordinaire – “leverages sensor data to fully automate the Procure-to-Pay process for fluid hauling, delivering legally enforceable automation” – courtesy of Blockchain. Already used by BP and saving countless others a whole lot of time, money and resources, this is blockchain impacting industry in significant, era-defining ways.
“Reshaping the energy future”, and with backing from energy giant Shell, LO3 has been busy making headlines with its innovative use of blockchain technology to redefine the ways in which energy can be “generated, stored, bought, sold and used” – with impressive results. Traditionally, community energy is distributed from a central point across a wide geographical area, which can be inefficient, and costly. Generating that energy and distributing it from the decentralised sources, courtesy of blockchain means a more streamlined, cost-effective energy supply for communities, which everyone benefits from.
Vakt – a consortium of energy and finance giants, rather than a niche startup, Vakt’s mission is to transform the global commodities trading industry through the use of blockchain doing what it does best – streamlining once cumbersome processes, driving greater efficiencies, and saving the time and money that traditional business models tend to love. Calling it a post-trade blockchain platform, Vakt has taken the old manual time-consuming and error-prone post-trade process and replaced it with a quicker, more secure, more transparent model that’s delivering 30%-40% efficiency and trade finance saving for the lucky participants, benefiting everyone across the supply chain from platform to customer.
Blockchain in Manufacturing
PWC has already reported that a massive 62% of manufacturing enterprises they surveyed have a blockchain project underway, and indeed, when it comes to this sector, blockchain has the potential to completely revolutionise its machinations, turning it 180 on its head and redefining practically every aspect of its traditional business model. Addressing industry pain-points across the industry, the use of blockchain in manufacturing is driving cost-efficiencies, enhancing production operations (and by default, product quality), optimising transport and logistics and streamlining complex payments activities for the early adopters, and everyone who’s anyone in manufacturing will be looking to the technology for a lucrative 2020.
24% of industrial manufacturing CEOs are planning, piloting or implementing blockchain technology
Blockchain benefits for manufacturing:
- Better Supply-chain monitoring for greater transparency
- Enhanced Materials provenance and counterfeit detection
- Improved design and engineering for better products
- Identity management
- Streamlined asset tracking
- Enhanced quality assurance
- Manufacturing innovators using blockchain
Project Provenance Ltd – With a view to redefining the entire supply chain, Project Provenance Ltd. aims to secure the traceability of product certifications using blockchain, proving product authenticity and origin and helping to prevent counterfeits. But it’s become more than that in its short life, empowering enterprise to deliver greater transparency across their products and supply chains, with all the data needed to back up their chat. What’s more, using the IoT to connect that data across environments – think stores, apps, shopping – customers have all the information they need to hand to better inform purchasing decisions. It’s a game-changer, and it’s coming to an enterprise near you!
Logistics is an element of manufacturing that’s crying out for change – inefficient processes, excessive costs, complex monitoring and cumbersome workflows … something’s gotta change, and blockchain’s going to do it. The SUKU project does just that, offering an enterprise platform that’s taking the pain out of products movement and making it more … wait for it .. efficient, secure and transparent – all the great stuff that blockchain’s known for. With a bright future backed by JP Morgan and Alibaba, amongst others, they say, “SUKU aims to become the universal symbol of truth for consumers and brands, making commerce more transparent and efficient through the power of blockchain”. We say this is the future of customer expectations and demands that soon every manufacturer will need to meet in order to survive.
World leader in flight control systems and critical control products, and bucking the blockchain/3D printing trend is Moog Aircraft Group, intent on using 3D printing to enable a point-of-use and time-of-use supply chain model, one with which aircraft parts can be printed only when needed, and resulting in huge savings across inventories, imports and logistics costs. Where blockchain jumps in is to securely transfer product data to the verified 3D printer, then, once produced, enabling authentication of the product. This ensures that only genuine parts are installed onto the aircraft.
What to do next
So there you have it – disruption all round! So will there be some way that the benefits of blockchain can drive your own enterprise digital transformation? Many would say yes – after all, the advantages that blockchain innovations can bring to the table benefit not just business, but customers, partners, vendors and suppliers too … Rewriting your own rulebook for supply chain management, streamlining access to sensitive data, creating a transparent business model … wherever you’re planning on going next, chances are that blockchain could play a part. If you’re ready to think about, let’s get the conversation started.