We’ve all heard a lot of chatter about Bitcoin and it’s growing popularity among financial communities around the world. The widely unregulated cryptocurrency is seen by many as an economic game changer with the power to provide millions of people access to the financial market. But what is likely to be the true game changer is the underlying technology, blockchain.
Bitcoin may have been the first use of blockchain, but it is only a small glimpse at what this technology can do. The Harvard Business Review believes that this technology will have a larger impact on business over the next decade than the current tech fads — big data and artificial intelligence (AI).
At the most basic level, blockchain is a decentralized and distributed ledger that records all types of transactions, not just financial. What’s so integral to the technologies value is the way the blockchain works. The World Economic Forum noted that “Like the internet, the blockchain is an open, global infrastructure upon which other technologies and applications can be built. And like the internet, it allows people to bypass traditional intermediaries in their dealings with each other, thereby lowering or even eliminating transaction costs.”
It is important to acknowledge that as the Harvard Business Review puts it, this is not a “disruptive” technology that will quickly change traditional business models. Blockchain is a foundational technology with the power to reshape institutions globally. But fundamentally changing the way societies, governments, economies and organizations operate isn’t going to happen overnight. So, while the potential impact for this technology will be widespread, it won’t all be happening in 2018. It will take years for full and distributed adoption. But that doesn’t mean businesses should hold off on preparing for the future.
Many leading enterprises have begun to plan for the technology and some have already started incorporating blockchain into their operations. For example, in late August 2017, IBM announced a partnership with major food companies, including Dole, Golden State Foods, Kroger, McCormick and Company, Nestlé, Tyson Foods, Unilever and Walmart to develop blockchain solutions for problems facing the global food supply chain, such as improving food safety by allowing food suppliers to trace contaminated products in seconds.
Financial institutions are investing big bucks into this technology due to its many potential FinTech usages, including the ability to verify money transfers easier and quicker. Synechron, an IT consulting and outsourcing firm, has started offering what it calls “Accelerators,” software that integrate blockchain into transactions such as mortgage lending and global payment systems.
One of blockchain’s potential applications is fixing internet security. We’ve seen numerous announcements from corporations about customer data breaches over the past year, which is no surprise with over 4,500 data breaches reported since 2005. With much of our information living on the internet there is an increasing need for companies to find solutions to consumers increasing data privacy concerns, and blockchain may be just that. The technology’s decentralized nature means that cybercriminals couldn’t hack into just one database and access millions of records.
With the onset of any new foundational technology, like the Internet — like the internet (though I wasn’t present for its adoption by the general public) — it is understandably hard to comprehend something so complex and life altering. But just as with the inception of the internet, as adoption grows so will the possible applications of blockchain, many of which we can’t even imagine right now.
As communicators, we are responsible for telling the story of blockchain and shaping its narrative. Still much of the understanding of blockchain revolves around Bitcoin and other cryptocurrencies. With those storylines dominating the media often related to its potential nefarious usage, it won’t be easy building trust and credibility for blockchain.
In 2018, we may not see sweeping changes to institutions, but that doesn’t mean they aren’t coming. Now is the time to educate ourselves and prepare for the potential shifts so when the time comes we are able to provide strategic counsel.
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