Using distributed ledger technology to create next-generation business connections
Excellent connections create excellent results. What if getting connected and carrying out transactions in an ultra-safe, transparent, and effortless way comes to you as a fully automated platform capability? Well, there’s a new kid in town, and it seems she’s here to stay. The blockchain is the most striking example of a next-generation platform that acts as a public ledger for open, collaborative transactions and “smart” contracts. It provides generic connection capabilities that speed up transactions, cut out the middleman, and provide full transparency while ensuring data integrity, privacy, and security. It seems we’re in the middle of a chain reaction!
- Blockchain was introduced as part of the underlying technology for bitcoin; it acts as a public ledger for transactions while keeping the users anonymous. It uses distributed computing to maintain data integrity.
- It is named “blockchain” as every block of transaction is signed using the previous block of transactions. If you want to alter a transaction, you have to change not only its block, but also all next blocks faster. This makes changing past data nearly impossible.
- There are two types of blockchain – permission-less and permissioned. Bitcoin is the most well-known example of a permission-less, public blockchain network in which anyone can participate. Permissioned solutions are governed by a consortium that defines the rules to get in.
- The smart contracts reside on top of the ledger. They are a digital translation of a contract. AXA Fizzy is a perfect illustration; if your plane is more than two hours late, the smart contract will automatically compensate you.
- Still an emerging technology, it has high potential for use in business areas such as payments, recording transactions, and strengthening trust – which quickly places it in a league beyond the pioneering areas of “FinTech” and digital commerce.
- The first use is obviously creating and managing cryptocurrencies. https://coinmarketcap.com/ is a perfect illustration of the current market.
- A second frequent use is to ensure traceability and immutability of content and documents. Use ranges from land registries, copyrights, patents, car lifecycles, to egg-laying dates.
- Blockchain is also one of the underlying technologies behind B2B platforms. It makes it possible to deliver transactions in a safe and guaranteed way via a combination of shared ledgers and the use of smart contracts. The Marco Polo platform, governed by technology companies and financial institutions, is a good example of a permissioned platform.
- The use of blockchain is supply chain management is seen as a killer usage. But, creating a well-governed ecosystem is not easy and requires time. Many initiatives are running, owned by one
- Blockchain has been evoked in many other use cases, from cybersecurity to customer onboarding (KYC for know your customer) and as blockchain matures, many initiatives will move to production.
- Improved value chain efficiency, by cutting out the middleman for trust and building on an open, secure platform for collaborative transactions.
- Increased data security, privacy, and auditability – all crucial with data protection regulations (such as the GDPR) becoming tighter every day in our increasingly digital world.
- Disrupting the way businesses exchange value and assets, enforce contracts, and share data across industries, potentially opening up entirely new business models.