Since 2008, blockchain has taken the world by storm, and businesses are eager to find out just how they can use it to their advantage.
However, with so much commotion around the topic, it can be a challenge to develop a clear understanding of the technology and how it can fit into the enterprise landscape.
Why Blockchain is Not Just for Cryptocurrency
Since its introduction, blockchain has been closely entwined, quite logically, with various types of cryptocurrencies, from Ethereum to Litecoin. Even traditional financial structures have adopted the tech to further their businesses in the twenty first-century finance.
While blockchain finds itself as a suitable bedmate for the financial world, its features presented broader markets with opportunities that extend much further past the financial confines that were initially anticipated.
Worldwide, there is a three-fold increase in roles involving blockchain. Across numerous industries, it’s poised to bring the following benefits:
- Healthcare: the technology has been used to create, store and process secure electronic medical records, to boost healthcare outcomes.
- Government: while not yet adopted globally, blockchain voting systems have been touted as a transparent voting method. Countries such as Japan, Estonia, and others have already trialed blockchain-based voting; others may soon catch up.
- Digital identity and security: with increases in identity theft and displacement through war and other migrating factors, ensuring a secure database of people’s identities is essential. This has a tremendous value for the ones in need to protect their rights.
- Business: beyond pen and paper, stamps and signatures, guarantors and third parties, blockchain-based smart contracts take trust out of the equation, allowing parties to fulfill contract obligations immediately based on certain criteria.
This is just the tip of the iceberg. Blockchain is infiltrating almost every industry from insurance to non-profit, energy to retail and even gaming—a far step from its cryptocurrency origins.
Advantages of Using Blockchain for Your Enterprise
While it’s clear that blockchain has some pretty hefty potential, let’s take a look at the benefits for enterprises seeking to engage it:
- Increased security: blockchain has been dubbed unhackable, and to date that has proven correct, mostly—while the chain itself remains unbroken, there are still weak points on the data input end which create vulnerability. However, on the whole, it presents a unique opportunity for enterprises seeking better data security due to its immutability and encryption.
- Faster transactions: transferring funds from A to B might seem simple through online banking; however, those in business know that any delay can prove costly. International bank transfers, for example, take between one and four business days, whereas blockchain can process them in a matter of minutes, if not seconds. Speeding up the process and ensuring deals can be done faster.
- Boosted transparency and traceability: while it’s not possible to amend the data stored on blockchain, transaction records are transparent and visible to all. This also means traceability, where the technology can be used to monitor supply chains and follow the trail of exchange between shippers and vendors, ensuring goods pass from one touchpoint to another like they are meant to.
- Reduced costs: blockchain removes third parties from the equation, leaving you with direct and secure peer-to-peer transactions, meaning a reduced amount of expenses and fees in the process.
- Decentralized control: it’s generally accepted that no single person or institution is in control of a blockchain, unlike, for example, a central bank. This allows transactional records to be processed fairly and without outside influence.
Challenges in Adopting Blockchain Technology
No system is flawless, and although blockchain does have some distinct advantages over traditional solutions, businesses seeking to engage the tech need to be aware of and account for the following factors:
- Getting the right specialists onboard: blockchain technology is new, and like with most recent inventions, this means challenges for organizations in terms of finding the right specialists. Software developers from Iflexion point out that with both in-house and outsourced teams it’s essential that the staff knows precisely how to work with blockchain technology in the enterprise setting.
- Scalability: while blockchain does provide an almost limitless growth potential, it largely depends on the underlying infrastructure and network capacity. Scalability takes time and planning, whereas a rush job could leave your business with lost data.
- Compliance with GDPR: 2018 was the year of data protection with the EU’s General Data Protection Rights law as the crowning glory. This law requires data to be held under strict conditions, and companies adopting blockchain might have to put special security measures in place to enforce data protection.
The Signs Your Enterprise Is Primed for Blockchain
It’s time to move on and examine if your enterprise is ready to start its blockchain journey, or if it needs to spend a little more time at the drawing board.
1) You have a workable plan for how you intend to engage blockchain
Blockchain isn’t a one-size-fits-all solution, and it can’t ‘cure’ all the issues that your business is experiencing. However, when implemented smartly, as part of an overall strategy, it can prove effective in boosting your enterprise’s capabilities exponentially.
2) You have realistic goals and expectations
Following on from point one: when introducing blockchain, it’s vital you target the solution to address realistic goals and set appropriate expectations. Not only will this allow your team to develop your blockchain more effectively, but the results will be more efficient too.
3) You have staff on hand
Before diving in at the deep-end with blockchain, ensuring you have staff primed to work with and maintain the system in the long term is vital. This expertise should be relevant for the blockchain platform you choose, as each of them—be it Ethereum, Hyperledger, or other—employ different consensus mechanisms and technologies.
4) You are ready to invest
In the long run, blockchain can reduce costs by cutting out intermediaries. However, in the short-term, you need to be prepared that your business will need to invest in developing the tech and maintaining it, especially as it scales.
5) You have calculated the risks and rewards
While you might wish to stay ahead of the crowd, before implementing blockchain or even thinking about it, take your time to examine the benefits and risks of the tech in direct relation to your business. This will give you a fuller idea if the technology is suitable.
Introducing new technology into your enterprise is never a light decision, nor should it be. While blockchain does present some fantastic opportunities, it’s important to remember how it fits into your wider organizational plan and goals, to be able to integrate it smartly and efficiently.