From a currency about nothing to a surging $18 billion market, bitcoin has captured the attention of economists and technology futurists since its inception in 2008. Amidst all of this attention, the far-reaching potential of the technology powering its valuation – the blockchain – has been mostly obscured.
But not anymore. A growing community of Fortune 500 companies are proving this distributed ledger’s value beyond the world of money and finance.
In a survey of senior executives from U.S. companies with annual revenues of $500 million or more, Deloitte revealed that 25% view blockchain as a top priority. In fact, 28% have even gone as far as investing at least $5 million in the technology, while 10% spent $10 million or more. However, there seems to be some confusion about the technology’s full potential as 39% still have little or no knowledge about it.
Whether you think blockchain is all hype or possibly one of the best bets for outcome-driven digital transformation, it’s difficult to disagree that the technology represents a radically new way of thinking about digital disruption. Let’s break it down a bit.
Blockchain matters when reimagining market potential
In its simplest form, a blockchain is an open-source distributed database using state-of-the-art cryptography which creates a platform of trust. The greatest potential of the blockchain resides in its ability to replace intermediaries with mathematical logic. The underlying fundamental concept of the technology reduces overhead costs when trading assets of any kind between two or more parties and proving authenticity, ownership, and truthfulness of information.
Take, for example, Walmart’s recent decision to pilot blockchain for its supply chain. The U.S. retail giant plans to use the distributed ledger technology to track and trace two of its high-volume product categories – pork from China and produce from the United States. Historically, supply chains are universally fraught with loss and inefficiency due to risk, fraud, errors, delays, and volumes of manual paperwork. However, Walmart is hoping that blockchain will help it overcome that all-too-accepted reality by making supply chain management more streamlined and efficient.
Meanwhile, a UK startup, Electron, is proposing a blockchain-based electricity and gas meter registration system to empower consumers to switch between utilities with greater ease. Because the United Kingdom does not have a central register of all electricity and gas meters, it can take between 17 and 20 days to change utility providers, which can be frustratingly long for consumers looking to reduce their expenses. However, by adding the blockchain to the process, the entire process could be reduced to mere minutes.
These two examples are only the start of the overwhelming opportunity enabled by blockchain. Deloitte advises that organizations across industries should consider how the technology can reinvent operations, value chains, and business models. Those that do will be rewarded with the realization of new efficiencies within costly, slow, or unreliable transactions and introduce new opportunities for partnership and collaboration.
Although excitement is lessening about blockchain as a crypto-currency and a mechanism for banks and financial services, venture capitalists are refocusing their efforts on core blockchain applications that have the potential to revolutionize business across industries. Recognition of the blockchain ecosystem across a variety of use cases and technology enablers will inevitably lead to a rise in industry adoption and unprecedented disruption. The surface has barely been scratched on blockchain’s most compelling uses cases – get ready for even more disruption coming your way.