Blockchain is among the most exciting technological advances to emerge in a generation — “on the lips of every business leader,” as Gartner says. Yet for all the attention, Blockchain remains a digital phenomenon that is as puzzling as it is promising — something that is talked about far more often than it is understood.
Enterprises need a better understanding of Blockchain in order to see how this technology might be of value to them. In this blog, we’ll wade through some of the hype in order to zero in on that value.
In Search of Enterprise Value
Less a technology product than a technology ecosystem, Blockchain involves recording data and transactions concurrently across a wide digital network — public or private — in ways that are transparent, chronological and difficult to alter once recorded.
“Blockchain” first gained wide notice as a technological approach developed anonymously under the pseudonym Satoshi Nakamoto (to this day, nobody is sure whether Nakamoto is a man, woman or group of people). It’s often mentioned in the same breath as Bitcoin, since the distributed ledger technology (DLT) that undergirds Blockchain helped solve the double-spending problem around cryptocurrency.
In reality, there are multiple Blockchains that are applied to multiple cryptocurrencies and hold promise for many other civic and enterprise uses. Unfortunately, reaping those real-world business benefits involves teasing out the value from what’s become — even by tech industry standards — an outsized helping of hype and mystique.
Looking Past the Headlines
The challenge for the enterprise is to see past these mercurial headlines and probe for more serious, secure, real-world business applications. Indeed, analysts warn organizations that “much of what you’ve heard about the Blockchain revolution is nothing but snake oil and marketing spin.” Even the name “Blockchain” is vastly overhyped (a beverage company recently added “Blockchain” to its name and saw its stock nearly triple).
Fortunately, a sober look at Blockchain can clarify its applications in business — including the realization that it’s not “Blockchain” per se that holds organizational value, but the underlying DLT associated with it. Leveraged correctly, Blockchain — or, more to the point, the distributed ledger technology associated with it — can be hugely valuable for the enterprise in its ability to document records or transactions across wide communities of interest.
Distributed ledger technology helps lower costs and increase the speed and visibility of transactions by reducing reliance on a centralized server, authority or middleman. In addition, the same DLT benefits that made Blockchain useful to bitcoin — a widely distributed ledger that is hard to alter once recorded — are useful in reducing error or fraud in all the settings where Blockchain is used.
A Wide Range of Blockchain Applications in the Enterprise
When correctly implemented, Blockchain can illuminate a “single source of truth” across a wide range of information sources. This can be hugely helpful in situations like emergency response, clinical trials, supply chain and other realms where diverse inputs feed a collective societal or business goal.
Not surprisingly, Blockchain is especially promising for IoT, where Blockchain can record data from countless devices, sensors and other endpoints. Similarly, Blockchain enables “smart contracts” — self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. In doing so, contract participants can come to a common agreement on what defines a successful transaction and then execute when agreed upon metrics are met.
All the things we’ve talked about in this post are just a few examples of how Blockchain can improve efficiency, visibility, auditability and profitability — but there are several hurdles in the way before Blockchain can be realized consistently and securely in enterprise settings.
Private Blockchains, which are what businesses typically would use, will still require a certain amount of centralization via Unisys or another Blockchain facilitator to address the security and related implementation considerations. But done right, it can revolutionize what’s possible in the enterprise.
As we’ll learn in a future post, the roadmap to enterprise value involves addressing the right permissions, security, interoperability, compliance and a host of other considerations required to implement and optimize a Blockchain system in production environments at scale.