The BlockChain: Why does it matter, Part 3
So far we have discussed, defined, distinguished and separated the blockchain from Bitcoin in Part 1, and covered just how blockchain’s distributed database mechanism works in Part 2. With all of that covered – and, hopefully, clear – let’s take a look at some real-world business applications of the blockchain and wrap up with a view as to just how you can determine the merit (which will lead to future value) of the ICO opportunities flooding the market (hint: you determine it the exact same way as you would do with any investment!)
With that in mind, and in sticking to the overall theme of this series, any solutions or applications that I suggest must address all three of the following fundamental questions: first, What problems can be solved; second, What requirements can be delivered to, and finally, What value can be added?
A Single Version of the Truth
There is an interesting peculiarity to the answer to this set of questions: whereas the challenge of this series is that any tech innovation needs to have a definitive response to at least one of the three queries, when it comes to blockchain usage in business and government, all three questions have a fundamental and definitive answer: blockchain provides, delivers and guarantees a single version of the truth – it simply becomes a function of determining the cost-effective application of the technology to solve business problems.
This “feature” guarantee the accuracy and veracity of those encrypted and timestamped records within the system removes the limits of past solutions, enabling: the guaranteed state of a bank account; accurate and accessible patient medical history; supply chain traceability and related quality controls; ownership proof and asset protection; identity verification; fraud prevention; contract management (and enforcement).
The list, while not endless, could certainly be extended but those listed are amongst the application that can provide real game-changers within their industry space.
Real World Savings
A blockchain database implemented to deliver to a business problem, is robust by design due to the in-built redundancy which stems from the inherent distribution of data of the blockchain mechanism. Compared to traditional (cloud or hosted) delivery of computer applications which require cold (or hot) failover capabilities involving duplicate (and redundant) servers, storage and communications infrastructure (including extensive and expensive data storage
for backups) it is the related distribution of reliability in a blockchain solution is in and of itself a game changer, delivering hard savings from the start.
The very nature of the distributed data (whether across a public blockchain provision or a privatised environment) eliminates the need for such redundancies, instead relying on the networked database nodes which ensure not only veracity but also availability.
Real World Applications
An Nigerian / pan-African startup well-known to me (and, given that I have interests, I will leave them unnamed) is utilising smart contracts across a private ecosystem to automate and enhance land registry services and capabilities for emerging economies.
Commencing with interconnected stakeholders in a property transaction, this business will not only enable the mitigation and even elimination of vast amounts of fraud across the sector, this blockchain enabled business solution will also directly impact landowners individually, their financial institutions collectively and the entire State and national economies as a whole, by:
Providing a foundation for more secure land investments
Enabling the expansion and modernised development of the mortgage market
Adding value to the credit and insurance sectors in general
enabling land owners / leasees to use their property as collateral for business loans
re-enabling trust in the national institution and economic / transactional pillar that is land and real estate.
Cryptocurrencies: Well, so far as coins themselves go, I have a primary rule that commenced with the introduction of Bitcoin: if it is purely a coin or token as the investment vehicle, I will continue to steer clear. Yes, there was a great deal of money to be made in such investments and yes, again, in some ways of course I wish that I had not followed my own logic… but the logic remains.
Sound Business propositions utilising a blockchain approach are always a good thing… but if the solution includes a coin then you have to clearly see how the business model actually supports – and enhances – the value of the coins or tokens… as for how you identify a sound business proposition in which you want to invest well, then you go back to the basics of investigating the proposal, the proposition and the people: the old fashioned way!
Where does it go from here?
Like any ‘wild west’ environment, the future is wide open as it stands. Will there be regulations, controls, restrictions on cryptocurrencies? Absolutely. Will that extend to solid business ideas that utilise these advanced and advancing technologies to deliver services (and, by extension, to enable and attract investment)? Absolutely not, in my view: as we move forward surely some mistakes will be made by regulators (and scams perpetrated by shady business founders) but sound and solid business propositions with intelligent revenue streams supporting viable business models which happen to use the same “flavour” of technology are not likely to be penalised simply for its use.
The Blockchain: Why Does it Matter, Part 3
by Daniel Steeves, Steeves Solutions, Germany and Nigeria
“Why does it Matter?” is a series of articles on those technology-orientated topics about which much has been written but not always so much said, at least not from the business points-of-view: what problem is being solved; what requirement is being delivered to; what value is being added.