In 2008, Satoshi Nakamoto published the whitepaper which would bring Bitcoin into existence. In 8 years, the digital currency’s valuation has grown from nothing to over $7 Billion USD. The underlying technology that has enabled this growth is the ‘Blockchain’ – a distributed, public record of all Bitcoin transactions.
A few weeks ago I attended a seminar on the Blockchain hosted by the Australian Institute of Company Directors. Over the course of an hour, Nick Giurietto (CEO, ADCCA) explored the potential for alternative implementations of the technology to transform the digital landscape.
But, what is the blockchain and what potential applications are on the horizon?
The blockchain enables organisations to create and confirm transactions on a network instantly without the need for a central authority.
It does this by creating a digital record of transactions which it shares amongst the computers on the network. This distribution of the record is what gives the platform its benefits of transparency, accuracy, immutability and reliability.
As the cliche goes, a picture says a thousand words. The following video by Financial News does an elegant job at explaining Blockchain and its impact on the financial sector.
Applications beyond Bitcoin
While the technology is well known in the currency space (thanks to Bitcoin) there are many other potential uses for the technology.
- Smart contracts – Agreements where the contractual parameters exist within in the blockchain so that when the transaction is successful it self-executes.
- Smart property – Transfer the ownership of physical goods by linking the value of the item to a verifiable digital asset.
Another example shown during the event was for Uproov, a mobile phone application that uses blockchain technology to allows the authenticity of photos and videos to proven.
The common thread in all examples is the concept of creating trust in a digital environment. The technology has the potential to rebalance the trust equation so that risk is equally distributed between all parties in a transaction.
As with all emergent technologies it is important to consider whether they are right for your organisation before you commit to putting them into play.
If you can see a role for blockchain in your business then here are my 3 tips to getting started.
1. Understand Blockchain
There plenty more to the platform that isn’t in this article. Get up to speed with the ins-and-outs of the platform before you make any decisions about its implementation.
Steven Norton at The Wall Street Journal published an article in February which explains the science behind the Blockchain.
2. Plan for the future…
The technology is likely to go through rapid growth as the platform matures. The implementations we are considering today are unlikely to be anywhere near as powerful (or complex) as what we will see in the next 5-10 years.
When planning your implementation consider your ideal future state. The technology might not be available today, but, you want your plan to be future-proof.
3. …But start now
Even though the platform is maturing there’s nothing to stop you from starting today, just start small!
Identify potential use cases in your organisation and put the blockchain in place with a view to continuous improvment based on your learnings.
The experience you’ll gather from these small test-and-learn projects will be invaluable when tackling your first major blockchain project.