I recently became fascinated with Blockchain and how it is forecasted to disrupt many industries and business processes. As a Business Analytics Advisor at Lodestar Solutions, it’s impossible to not think about how Blockchain will improve the world. But what concerns me is how many executives have no clue that the Blockchain train is coming down the tracks. Executives need to take the time to learn about Blockchain or they will get runover.
Today I’ll give you a little introduction to Blockchain and how Blockchain will disrupt how business is done. In a later blog, I’ll share how Blockchain will affect Business Intelligence and how companies like IBM are paving the way for the blockchain revolution. But let’s start with the basics.
What is Blockchain?
Blockchain is a technology that provides tamper-proof data that can’t be altered or deleted without detection. It spreads the records across numerous computers within a network. It’s kind of like a bunch of puzzle pieces. Each piece is a record on a computer. When we decode the puzzle, all the pieces fit together to represent the transaction. But the cool thing is the puzzle pieces are permanent and don’t provide the answer without all the pieces in place. So, the blockchain is impossible to hack.
Blockchain is Not Just Cryptocurrency
Blockchain is the technology behind cryptocurrencies like Bitcoin and Litecoin. But, it’s so much more. To say Blockchain is only cryptocurrencies is like saying a computer is only good for word processing. Like the computer, Blockchain has many life changing applications.
Blockchain and Contracts
Think about how many contracts there are in the world. Every contract has set terms and conditions that the parties must deliver. To ensure the terms are upheld there are middlemen.
Middlemen make sure the deal is upheld and that people get paid. Middlemen in contracts are organizations like banks, lawyers, title companies…. all taking a fee to make sure the deal goes through. Now, imagine if we could eliminate the middlemen and decrease the risk of fraud. Blockchain will improve the world with smart contracts. Smart contracts are based on blockchain technology like Ethereum, allowing the parties to create a “if / then” contract in which the first condition of the contract must be verified as complete before the next step happens. Because it is coded in the blockchain, it removes the middleman like the escrow company.
For example, let’s say I want to buy a handmade Moroccan rug from a merchant in Marrakech, but I want to make sure the rugs are authentic, and I want to receive the rugs before paying the merchant. The merchant on the other hand wants to make sure I pay him for the goods. Blockchain can verify the legitimacy of every part of the process, helping both parties feel comfortable and eliminating the expensive rug store that is just a middle man. Think of how much money I could save on my rugs buying direct. The same can be in real estate, for example with project https://imbrex.io/, and this can't stop fascinating me!
Blog on Blockchain and Fraud -https://www.forbes.com/sites/danielnewman/2018/04/17/3-ways-blockchain-can-help-combat-fraud/#7e14c55192a4
Blog on Smart contract - https://blockgeeks.com/guides/smart-contracts/
Blockchain and Public Records
Think of all the public records. Medical records, land title records, legal filings, financial records, ect. But how secure are all the databases that hold this information? Nightly we are turning on the news to find that a major organization has been hacked. Heck ½ of all American’s had their information compromised with the Equifax hack. But what if all those records were spread across multiple computers so the hackers couldn’t get all the information? Blockchain will improve the world by providing more security than centralized databases. It’s foreseeable that blockchain will take over records databases across both the public and private sectors. Don’t believe me? Dubai is setting a goal to become the first blockchain powered government. The emirate wants all visa applications, bill payments and license renewals, to be transacted digitally using blockchain by 2020. They are estimating that it will save them $1.5 Billion annually.
Blockchain Will Improve the World
Is your head spinning with ideas yet? Executives need to understand how Blockchain could increase the security of transactions and data. Blockchain could save millions of dollars in fraud, but more importantly Blockchain could transform processes and complete industries like banking and law. If I were a Sr. Partner in a law firm, I would be closely examining what this could do my future revenues.
So, what are your thoughts? How do you think Blockchain will improve the world? Please share your thoughts in the comments below and let’s brainstorm.
Not sure where to start? Maybe you could use the help of a technology thought leader? To schedule a brainstorming session, contact Services@lodestarsolutions.com.