After attending many Chicago blockchain community meetups and participating in the Fintank Blockchain Global Summit, I'd like to share what I've learned with our SIM Chicago network.
Blockchain is a distributed, common record of transactions, maintained by a network of computers on the internet without the need for approval from a central authority. The blockchain creates a shared record of data which is virtually tamper-proof.
Blockchain is the technical platform for bitcoin. The blockchain architecture also holds great promise for other applications. The latter has been my area of study.
Blockchain could revolutionize the back office operations of organizations. Currently the absence of a common record is a costly problem resulting in the need for back office teams to perform extensive reconciliation. Blockchain's distributed ledger is a common record which virtually eliminates the need for reconciliation providing cost savings.
The following are a few examples of blockchain opportunities that could reduce cost and complexity: property title ownership transfer, the transfer of ownership of goods through a supply chain (i.e., traceability), post-trade clearing and settlement, digital media rights management, digital identity (passports, health records, citizenship, etc.).
Walmart is requiring its California produce suppliers to join their blockchain-based supply chain by January 2020 in order to reduce produce recalls. Learn more about the problem, solution and benefits here.
Why use blockchain rather than a database solution? Four reasons you might use blockchain-
Do multiple parties share data?
Do multiple parties update data?
Is there a requirement for verification?
Can intermediaries be removed?
Here are a few observations from my 2018 study of blockchain:
We are in the early stages of blockchain; it is advancing rapidly; and common standards must occur before we reach feasibility at scale.
The majority of work to date is on private blockchains with a small number of partners rather than on public blockchains (e.g. crypto currencies).
Large companies are experimenting with blockchain. Their suppliers/partners will need to join the blockchain to retain their client's business.
Blockchain provides a great opportunity for IT leaders to make a big impact at their organizations. Perhaps blockchain could bring major cost savings to your business processes. Engage with your business leaders to show them how.
To get started, use this approach. Have a team member research blockchain, experiment with a small internal project, learn lessons and apply them for the next iteration. Your team will be in a stronger position when your large customer insists you join their blockchain or you choose to disrupt your industry!
Bonus: here is a simple blockchain visual demo for those who are curious to see how blockchain works.
I look forward to hearing about your 2018 learnings at one of the upcoming SIM events shown below.