The most interesting (and promising) areas in the Blockchain are all those that are outside the crypto-currencies: health care and medicine, logistics, land cadastre, state and corporate document circulation, says UST Global’s José Luis Rivero
By: José Luis Rivero, Director of Digital Solutions & Consulting Services, UST Global
In 2016, Barclays stole the Blockchain limelight and showed the industry some real-world applications for distributed ledger technology. Riding on the similar wave, China Government announced the use of Blockchain to send invoices and collect taxes. This latest initiative by the China government indicates how the technology can further be utilized in day-to-day applications.
There is no escaping the newer technology trends if companies want to stay competitive in the market, especially ones that has global implication. Blockchains are largely interesting because, unlike most modern technologies, they decentralize power, so it has the ability to disrupt business models, industries and even most important, the society.
There are a multitude of challenges that companies face while exploring the Blockchain world. The biggest challenge is that there are no regulation and standard of how the transactions are being written.
Misunderstandings of the true technical abilities of Blockchain technology, coupled with the lack of general awareness about Blockchain technology, are some of the other significant barriers to mainstream adoption. Many people still do not understand what Blockchain is, or what it can do.
Additionally, companies are afraid that there are no validation or proof of concepts in the industry, especially in the case of enterprise transactions. Majority of consumers in developed countries find it sufficient to use non-Blockchain technology for everyday lives. There is, therefore, no sense of urgency or need to adopt it. In a gist, the challenges to adoption of Blockchain is that it is still at a very early stage.
This, however, has changed today. With large organizations adopting Blockchain, its power and disruption is evident and companies are now beginning to understand how Blockchain technology works and the impact that this technology could have in their business.
Also, most of them are already investing on it and trying to find out which are the outcomes/benefits of adopting it. Any emerging technology goes through an initial stage where adoption is slow. It takes some time for the early adopters in the market to get the pilots and proofs of concepts in place and shift the curve to broad adoption.
Yet, another common challenge companies who are looking to adopt the trend face is finding an ideal technology partner that understand their requirement and offer a sustainable solution. To address this challenge, the companies can follow this strategic four-step approach.
1. Firstly, the company needs to have a holistic point of view of Blockchain and DLT (Distributed Ledger Technology), and how they can disrupt their industry and what business cases can bring in disruptive savings or efficiency improvements.
2. The major challenge once you have a vision is ‘who will execute your vision’ – it is recommended that the company has a Center of Excellence (CoE) approach, which will have a core expert team who can help shape the solution.
3. The companies need a solution framework that will facilitate swift adoption and on-boarding of Blockchain based solutions and services. Here, IT service providers will play a key role in making a perfect match between the company’s IT strategy and Blockchain trends.
4. The next step is to conduct research, rapid prototyping, co-creation of use cases and proof of concept development on Blockchain technology and platforms, using an agile approach. A key point of a solution is how this component works with the rest of your technology environment, and once this is understood, the actual integration of Blockchain based technologies can happen with the company’s existing technology ecosystem.
With important components like immutability, security and transparency in the digital arena, companies are realizing the true value of Blockchain and we can expect fast adoption across industries and domains. The most interesting (and promising) areas in the Blockchain are all those that are outside the crypto-currencies: health care and medicine, logistics, land cadastre, state and corporate document circulation.
Regarding the financial sector, everything that is beyond payments and transfers is interesting: trade finance, fixing of pledges, issuance and trade in shares, document circulation between banks and their corporate clients. To be more specific, we are talking about the segment of smart contracts.
Unlike other technologies, Blockchain is here not just to stay and grow, but to disrupt! It hold a promise to transform businesses around the world.