Blockchain is one of the hottest topics in business right now. It’s a topic synonymous with innovation and disruption, it’s a topic that’s accelerating into the mainstream.
Coined by Harvard Business School as the “quiet revolution”, there is little denying the applications of blockchain technology and the potential change that the introduction of this technology will have across business sectors from finance to medicine to retail.
There will be winners and there will be losers but it will be those who adapt and who understand the most creative and innovative applications of blockchain that will thrive.
So what is blockchain?
Blockchain is a distributed record that exists on multiple computers at the same time. It is constantly growing as new sets of recordings or “blocks”, are added to it. Each block contains a timestamp and a link to the previous block which forms a chain. Hence Block-chain.
The database isn’t managed by any particular body or 3rd party. Instead, everyone that looks after a particular blockchain network (these people are often referred to as ‘miners’) has a copy of the whole database. Old blocks exist forever (as each block is linked to the one before it), and new blocks are added to the chain irreversibly, making it impossible to manipulate by faking documents, transactions or other information.
Records on a blockchain can be anything from a legal contract to a financial transaction. Records on a blockchain are kept secure through encryption. So although everyone has access to all of the records, only a user who owns a special cryptographic key is able to physically add a piece of information to a record.
Blockchain technology offers a completely different solution to how information is commonly stored, distributed and shared in the modern Western world. The range of its applications are vast, and the potential benefits if deployed and used effectively are wide-ranging. If broadly adopted, blockchain technology has the ability to change almost every area of transacting and finance, affecting both us as individuals and businesses.
What are the benefits?
Today by far the most common way to transfer money is through centralised financial institutions (i.e banks). Blockchain, in theory, eradicates the need for banks. Blockchain technology has the ability to take on the three key roles of banks – registration of transactions, identify verification and contracting. This opens up opportunities for areas of the financial sector to switch to blockchains, disrupting the sector, reducing costs and improving efficiency.
Increased agility for businesses
As transactions will be able to be completed directly between two parties with no intermediary, deals will be able to be completed quicker, digitally, with fewer fees, less complexity, much more securely, and improved proof of transaction.
Tracking supply chains
Blockchain has countless applications, so certainly isn’t just limited financial processes. Blockchain technology can also be used for tracking physical goods within a supply chain. This enables businesses of any size to track their suppliers in real time. Ensuring they only ever purchase the stock that they need to.
Blockchain technology allows a contract to be written as programs that will be activated only when both contracting parties enter their keys, thereby signing the contract. Smart contracts can also pull in information from external data sources eg) stock price or news headlines enabling dynamic contracts to be created when certain conditions are met. The possible application of smart contracts is huge from crowdfunding to legal processes, rental agreements to flight delay insurance.
Typical types of R&D using Blockchain
The opportunity for businesses to innovate by leveraging blockchain technology is enormous. Innovation using blockchain is not exclusive to currency, the applications of blockchain can enhance human and digital interactions in countless ways.
Examples of how blockchain is being applied to different business sectors:
Medical Records – using blockchain to share medical data as efficiently as possible
Diamond trade – blockchain is being used to track individual diamonds, from the point that they are mined to the customer they are sold to.
Security for the music industry – Blockchain can be used to identify and timestamp music once published to prohibited illegal downloads, copying or modification.
Verifying Artwork – companies are using blockchain to enable artists to verify their work building a reliable and honest leger of global artwork.
Blockchain and R&D
Blockchain is still very much in its infancy with constant R&D being applied to every sector that it touches. If you are experimenting with blockchain you are most likely eligible for R&D tax credits. Whether you are an SME, or work for a larger corporation, Kene Partners and our network of technology specialists can help you to navigate the R&D claim process to help remove the barriers to innovation.