Blockchain, what is it? Why do I need it? Where do I find it?
It reminds me of when I first heard about the internet. The thought of having access to information about anything, at any time seemed crazy. And if that was not enough, I could message someone without talking to him or her, also at any time. Now I use it automatically, every day.
Remember brick phones? Another crazy idea that we could carry a phone around with us and we could call anyone or, receive calls by any one, at any time. What a concept. Now, everyone carries around this device, with the internet attached to it!
I am certainly not old enough to remember the first automobiles rattling down the street scaring the horses, or machinery doing the menial and laborious jobs men did by hand with brute force. What about the first rocket into space and landing on the moon? It seemed like a miracle that we could look down on planet earth instead of looking up to the “man in the green cheese moon.” Now, we send space probes to land on moving meteors.
All these evolutionary ideas seemed so fantastical at the time, but today it would never occur to any of us to not travel in an automobile, not to take our phone with us and not interact on the internet hourly. We take space for granted and anticipate new images of what’s out there. Even that crazy idea of a microwave oven is an item we cannot live without now.
The point is that every crazy idea started as a laughable concept. This brings us to blockchain. Another crazy idea that will become commonplace in the next few years. It will change communications, transactions, government, voting, marketing, health care, media, technology, and ultimately the current financial system. And more things we cannot even fathom at this stage. An evolutionary idea that will impact every one of us, and one we will soon take for granted.
In 2019, Deloitte did a global survey of almost 1400 executives in 10 countries. What they found is that blockchain has gone past the exploratory, wait-and-see stage to the actual investment and implementation stage. Enterprises are willing to invest up to $5 million in blockchain, as well as making it a priority to their strategic planning.
As blockchain matures, companies are becoming less concerned over security issues and are focusing on implementation into their operations. In fact, with exploration into potential uses, more companies are working within consortiums for such implementation. Nevertheless, the survey indicates that only 23 percent of respondents have initiated blockchain deployment, but 43 percent still see blockchain as overhyped and not yet ready to take the plunge. However, this attitude is relative to the normal path of the technology’s maturation and evolution into a more grounded business solution
Interestingly, the survey also revealed that blockchain is actually gaining more acceptance in more industries from telecommunications to health care and government; and the executives express more confidence in blockchain’s potential in day-to-day business operations.
As blockchain continues to mature, investment will continue to increase due to its long-term potential to create solutions to basic operations. For example, “smart contracts and other token-based transactions can help ensure that artists, agents, producers, and other creatives receive their share of revenues generated by their work, no matter how it is used or repurposed,” says Deloitte Consulting LLP principal Linda Pawczuk, Deloitte’s consulting leader for blockchain and cryptocurrency. It can also be used for intercompany transactions and warranties financing such as trade finance, letters of credit and invoice factoring.
Most people first learned about blockchain in terms of Bitcoin. The concept was that a new “cryptocurrency” would revolutionize the financial market and eliminate the need for traditional banking. Nevertheless, as the technology has evolved, its uses morphed into other applications such as the management of loyalty points, digitizing physical assets, and creating virtual wallets for finance management and reconciliation. To that end, “we believe executives should no longer ask a single question about blockchain but, rather, a broad set of questions reflecting the role blockchain can play within their organizations,” adds Linda Pawczuk. Such questions may include:
- How are blockchain-enabled processes changing the way my sector does business?
- How can blockchain reshape my industry? What are my long-term objectives and strategies?
- Does blockchain create the potential for new market ecosystems, and what role should I play?
- How do I leverage the inherently open nature of blockchain?
- What opportunities does blockchain generate for co-creating new markets?
- Where are my biggest blockchain blind spots?
Trying to retrofit blockchain into an existing enterprise can become difficult and more expensive to overcome, whereas creating an enterprise with blockchain at its foundation disrupts the norm of traditional business models. For this reason, many long established enterprises adopt a more pragmatic approach to see what the disrupters accomplish before they determine the extent to which they invest in blockchain. As in all things, risk-takers will invest, implement and ultimately fix the kinks that will lead other enterprises to follow suit. However, executives still agree that blockchain is the future.
It is also interesting to note the varying approaches of different countries surveyed. For example, China is fully invested in blockchain applications but also bars any token or cryptocurrency implementation. This in turn causes Singapore to focus on tokenization. Israel, on the other hand, is a leader in blockchain development and uses it primarily in governmental applications such as intelligence gathering and data storage. This only underscores how adaptable and useful blockchain is across the board. Your focus determines the application of blockchain within your enterprise and its operations.
In conclusion, we can easily say that blockchain has become rooted in our world. Its future depends not only on its applications, but also on the regulations imposed to protect the world. All new and evolutionary ideas changed the world, some good and some bad. The internet, after all, led us to social media. As responsible business owners and developers, it is vital we recognize the lesson and try to see the future potential of blockchain as well as its disadvantages so that we can attempt to offset catastrophe and chaos. Blockchain is a tool and a means to make the world a better place that can ease the complexities of daily life. Its use is relative to the evolution of humanity and its place in the universe.
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