Initially created to address the problem of immutable truth and popularised by its usage in keeping track of cryptocurrency transactions, blockchain has evolved.
In the last few years we have seen some new players benefit tremendously by making use of blockchain. The most obvious examples are cryptocurrencies, but we have also seen startups enable their investment through tokens that are generating far more investment capital than they could ever have hoped for. These companies have created unique dividends while saving themselves from going through the red tape of private investment, the risk of venture capitalism and the lucky dip of kickstarting. Now, anybody can diversify their portfolio by buying a token.
New applications of blockchain have spread throughout countless sectors including transportation, financial services, consumer and industrial products, healthcare and the public sector. Governments around the world are already exploring the use of blockchain to better manage the transfer of data between departments, a sure sign that this technology is becoming more mainstream. There is also growing excitement around how blockchain can prove hugely valuable in protecting data privacy in the new era of GDPR.
But has blockchain reached its potential in the enterprise?
Businesses are clearly interested in the capabilities blockchain poses, but, from their perspective, they see too much uncertainty in changing how their business is run. It’s almost like the old game ‘chicken’ in the sense that no one wants to be the first to integrate because, in doing so, you simultaneously risk your own business whilst providing your competitors with key insights as to how best to adopt.
CIOs that are interested in integrating blockchain then face the challenge of finding an application that is both uniquely solved by the technology and provides competitive advantage. Without this, again, they’re just investing their resources for everybody else’s value. There are no advantages to fixing what is perceived as not broken.
Indeed, many CIOs don’t fully understand the advantages of the technology yet. In today’s data-driven economy the value of a technology that can ensure immutability may not be readily understood. For example, they may still see user information as their own commodity and not as an identity.
Cost and confusion
A little knowledge is a dangerous thing: many people misunderstand the true value of blockchain and see its advantages as disadvantages. The immutability of blockchain works best when it is public, however, organisations want permissioned blockchain with only a few controllers. They fear the openness will result in a lack of control.
This openness though is blockchain’s biggest advantage. Having thousands of miners constantly checking blocks is what keeps information stored in a blockchain honest – if it is a part of the chain, then it can’t be tampered with.
Organisations are finding it too difficult to give up their traditional DNS service for one managed by blockchain. It’s too expensive to commit blocks, processing requirements and therefore, energy requirements.
That expense is limiting the performance of blockchain over traditional technologies. This is exemplified by the fact that cryptocurrency blockchains constitute the most powerful computing resource in the world but only make up a small fraction of the global financial market.
Blockchain has been around for a good while but it’s only through the recent developments in social media and personal interactions on a global scale that we will start to see a drive towards better use of blockchain technology. The current shift towards cloud computing and mobile devices gives organisations the opportunity to come up with new ideas to impact a global market, a market that is ready to easily consume them through interactions online. We’re slowly but surely building an environment through which blockchain solutions can be fully realised. The small innovators that choose to do so will influence – through their popularity and ingenuity – the larger more constrained companies.
Colin Truran
Principal Technology Strategist, Quest
