The rise of blockchain technology is coming. How quickly the tech becomes ubiquitous, and who will embrace it, still remains to be seen. But big companies in the tech sector (e.g. Microsoft) and in financial industries are spending R&D dollars on discovering just what this distributed ledger can do.
Blockchain is a tracking database that was originally developed to run Bitcoin. The database uses algorithms to record digital transactions reliably with an impressive amount of anonymity. “Blocks” of data are created and sent across a peer-to-peer network without the need for a central authority or third party to verify or confirm the exchange; the system does all that itself through cryptographic methods.
Though full adoption of this system is still unsure, and a timeline on feasibility is still in the works, being ready to be an early blockchain adopter can, theoretically, put businesses on the frontlines of the new cutting-edge digital culture.
Here are a few ways your business can adapt to blockchain technology.
What Could Blockchain Do for My Company?
The potential effects of Blockchain technology are numerous, but here are some of the largest.
Blockchain might streamline transactions by offering a single source of information, always updated, and in near real time. All your records will be digitized and available at a speed faster than what you currently experience.
The cost of intermediaries will also go down and enable better, immutable ledger records. By adopting what some are calling “smart contracts”—coded sets of rules designed to execute when specific actions occur—automation of many financial services that require timely back-and-forth communication could happen in a fraction of the time.
Pilots and Working Groups
A good place to start the consideration of blockchain technology is by putting together a small working group tasked with designing a path to successfully using the tech in a way that aligns with your company’s overarching goals.
Start with a Hypothesis
Once this talented group is formed, develop a working hypothesis on how a distributed ledger can not only support, but improve, several aspects of your business.
Focus the working group to select a couple of these hypotheses and transform them into working pilots. From there, it’s a matter of learning as you go. If it’s going to work, you should see ROI based on your hypothesis.
One of two things will happen: you see ROI or you don’t. If you don’t, then it’s likely time to reconsider blockchains for your company, at least for now. If you do see good ROI, then it’s time for you to consider a strategy for the new technology.
Develop a long-term plan that could be integrated deeper into your business strategy. Consider the successes you found with the pilot, but also any new awareness you may have gleaned from working on the pilot.
You’ll then have to decide whether the risk is worth scaling now or whether you should wait to see how distributed ledgers come into play across your industry. You may also decide to never scale, depending on the results and where the technology goes. Either way, you haven’t committed the core of your business to this new technology, nor are you unprepared if it takes off overnight.
Blockchain technology is still very new and largely untested. Many companies and startups are exploring the possibilities of distributed ledgers, but its future is still unsure. Exploring the possibilities early in smaller, controlled ways may give you a head start on your competition as you hurtle into the future of the digital age.
- FinTech Adoption Has Surged Globally Over the Past 18 Months - September 29, 2017
- Understanding Blockchain, Cryptocurrency & Bitcoin - September 27, 2017
- What is Blockchain? - September 25, 2017