It’s true, blockchain has been around for more than a few decades. But, today blockchain is being used in new and novel ways—forcing us to be more human as we search out new forms of connection and build trust into ecosystems that have previous lacked it. We’re seeing unprecedented changes in everything from supply chain management to how we use incentives in business to the ever-growing arena of digital products. And, while it can be extremely hard to do blockchain right, the payoff is proving worth it.
Blockchain is a distributed, immutable system of record. It’s not a spreadsheet in the sky; It’s not a slow database—it can’t be reduced to that. It’s a complex set of distributed decentralized immutable nodes making up an ecosystem. Blockchain works together with a set of components that have been around for 60 years but are now being used to achieve things like consensus and efficiency. Here are just a few of the reasons why blockchain is different:
Authenticity, truth and transparency (ATT)
Increased individual agency
New and innovative governance models
Privacy and pseudonymity
Blockchain requires us to be more human, knowledgeable and adept. We’re starting to layer in complex decisions and fields that we must have a basic grasp of if we want to succeed with this technology. Because whether we like it or not, blockchain in now evolving at a much faster rate than other technologies we’re used to. When we’re building blockchains and thinking about who we want to have in our ecosystem, we have to make sure our data models are correct because it’s going to be painful to have to roll anything back. There are no fully autonomous systems that have been totally successful yet, so we need to work on building trust principals into our systems. Because with blockchain, what you put in is what you get out—forever.
Let’s be real—the ‘how’ of blockchain is hard. It can be a lot of fun, but it’s far from easy. Blockchain is different: Blockchain is protocol—and the hard work is in the protocol that you have to develop at the very beginning. The most expensive part of making blockchain work for your company is putting the right team together. Because if you don’t build it right the first time, it is super hard to change. In fact, building the right team is the most important part to using blockchain for business.
How blockchain improves incentive structures
So where is blockchain really making the biggest splash right now and how can we follow suit? Stop and think about this: One of the most powerful things a company can have are incentives. An incentive structure can change the default behavior of individuals and be a powerful tool. In business we don’t see incentives being used as much as they should, but incentives are becoming more important as our world becomes more digital. So how does blockchain support incentives? Blockchain can build a shared ledger to help us create new incentive systems and track and transfer incentives in new and easier ways. This can be a game changer for businesses in regards to how they interact with employees and customers, creating more connection and human-centered experiences. “An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation.” –Steven Levitt
Blockchain changes everything for supply chain management
Supply chains can be long and involve multiple organizations and people, which creates disparate systems. This makes everything hard to track and creates discrepancies. Blockchain can eliminate much of these issues with a much more fluid transfer of information because it provides ongoing audit systems that happen continuously. For example, De Beers Jewelers recently starting using blockchain technology to improve its sourcing of diamonds. It allows De Beers to communicate to customers exactly where diamonds are sourced from and ensures that human rights aren’t being violated in the process. (Blockchain win!) Additionally with blockchain, Walmart is able to pinpoint the exact location of an e coli outbreak and recall only a targeted portion of their product, rather than recall the entirety of the product, saving a significant amount of money. Doing this has also increased consumer trust. Now, we all can know where our products come from. (Another blockchain win!) Blockchain improves trust and supply chain management through:
Asset tagging of inventory
Low-cost and accurate tracking
Visible transfer of assets
Cross-border transaction and transfer of goods
A new frontier for digital products
Digital products are booming, and blockchain is leading the charge. One of the biggest things blockchain is helping with is eliminating counterfeiting and oversight of products as things change hands across borders, businesses and people. For example, currently there isn’t a good way for two companies to exchange loyalty points easily, but blockchain is positioned to change that, which will make things massively easier for consumers and equally beneficial for business partners. Blockchain gives portability across complementary systems to allow for easy cross marketing and partnerships. It’s also making waves when it comes to branded goods for purchase in things such as video games, which people are already spending huge sums of money on each year. In short, here’s how blockchain is changing the game for digital products:
Purchase and trade of product futures
Digital representations of flagship or vintage items
Secondary market management
Proof of authenticity
Proof of ownership
Software licensing, collective goods, counterfeiting, in-game branded digital goods
Saying that blockchain is ‘revolutionary’ isn’t just lip service—it is very literally changing our digital landscape and making what used to be impossible, possible. Investing in the right team, with the right skills can ensure that when your company decides to use blockchain for business, the process goes smoothly right from the start. Remember, what you put into blockchain is what you get out. If you prepare yourself for the challenging complexities from the get-go, you’ll quickly see how this exciting technology can pay off.