Chances are you’ve probably heard of blockchain – and you’ve almost certainly heard that it’s going to be the next big thing. You’ve been told that it could transform the way that both your business and the market work. However, more likely than not, you are in the dark as what all the fuss is about and how this is going to happen.
That’s because this technology is at a very early stage in its development and few can assess realistically what it can actually deliver. In fact the first blockchain was only created in 2009 as part of the development of the crypto-currency Bitcoin.
So what actually is blockchain, and is it really as important as many people have made out?
The DEFINITION of BLOCKCHAIN
A blockchain is a type of distributed ledger, which records a series of transactions as digital records or ‘blocks’. What makes it unique is that these blocks are inextricably linked, despite not being stored in the same place. This makes the records secure, because there isn’t a central source to be attacked and the records can be made unique and permanent. They can’t be altered without the changes themselves being recorded.
Blockchain was a breakthrough technology for crypto-currencies, because it could be used globally and prevent anyone spending the same unit of currency twice. For a business, it creates a way of maintaining a unique, indisputable history of all its interactions with different parties: suppliers, partners, customers and ensure the traceability and integrity of its data.
HOW can BUSINESSES use Blockchain?
Proponents of blockchain have latched on to its transparency as a solution to every problem facing businesses, from supply chain management to micropayments. However, as with so many breakthrough technologies, blockchain can’t bring about these changes by itself. It’s the systems and applications built around it that will drive real impact.
Certain applications are straightforward. For example, a company could use blockchain to store details of its unique product formulation. The production line at a filler, for instance, would automatically stop and alert management, when a discrepancy was detected against the original records – any change a third party (hacker, malaware) attempted would be spotted before damage could take place.
Transforming DATA QUALITY and DATA OWNERSHIP
It’s not just the management of data that blockchain could change, though. Potentially far more significant are the implications of the technology for ownership and control of proprietary data.
Looking at the chemical industry, blockchain could take this out of the hands of manufacturing partners – and put it into the hands of the owners whom the data relates to. This is critical when brand and public image are at stake and the supply chain behind a marketer is large, fragmented and possibly outsourced. Any change of hands brings with it a risk, the more severe the risk, the higher the level of security required. For patented products and registered trade marks, avoiding counterfeit is paramount and a switch towards higher security, control and integrity, certainly worth the investment behind it.
WHERE are we in the PROCESS?
Aspects of this huge transformation are already happening. The UK government’s Midata project, for instance, has made financial services companies and energy suppliers store their data in a form that customers could access and share with other providers. One of the major barriers to large-scale adoption of the personal information economy has been the technology required to create secure, personal data stores. If blockchain solves that problem, then the relationship between people and data could be transformed, and marketing could be on the verge of a revolution.