From theory to value: using blockchain in the enterprise
What is blockchain?
It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. A blockchain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic has of the previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data.
How blockchain technology is being used around the globe
Around the world, companies and consortiums have been trialing pilots that put blockchain to the test. While still an emerging technology, these early trials demonstrate the viability and, indeed, the huge possibilities of blockchain.
PaymentsR3, backed by 42 of the world’s largest banks, has already started experiments with Microsoft’s Azure-based Blockchain-as-a-Service to develop Ethereum as a bank-to-bank global transaction system.
One of the most promising applications of blockchain technology is the smart contract. It can execute commercial transactions and agreements automatically. It also enforces the obligations of all parties in a contract – without the added expense of a middleman.
When identity management is moved to blockchain technology, users are able to choose how to identify themselves and who will be informed. They still need to register their identity on the blockchain somehow, but after that, they can re-use that identification for other services.
A solution in search of a problem
Falling within the remit of digital transformation, there are many opportunities to use blockchain technology to solve common business problems. The nature of the technology lends itself to projects and processes which rely on multiple parties to access or add to transactions. With this in mind, blockchain will not solve all business problems. For some digital transformation projects, it makes complete sense to use blockchain; for others, different technologies may be more suitable.
The processes which benefit most from blockchain are those that rely on a foundation of trust across multiple, disparate parties. Within the banking sphere, this could include transactions and payments; customer verification; smart contracts; and trade finance.
How to get a successful blockchain pilot off the ground
1. Build internal awareness: the first step in any blockchain journey is to build knowledge and awareness within your organization about its potential. While there has been a lot of talk about blockchain technology, there is still a great lack of understanding about how it works.
2. Join or start a consortium: Many mistakenly believe that blockchain pilots can be trialed internally. This misses the point of blockchain – which is all about establishing and maintaining trust between parties that usually wouldn’t trust each other. The best use cases for blockchain are those in which disparate parties sign up to a distributed ledger that offers a benefit to all. For example, you could start by involving your suppliers or vendors in a pilot blockchain.
3. Use Blockchain as a Service: Yes, it exists. Nihilent is a global Microsoft Gold Partner with deep expertise and an industry leader in implementing blockchain technology and offers Blockchain as a Service (BCaaS) to help companies participate in pilots without having to reinvent the wheel or invest in technology. Through BCaaS, you can identify use cases that will deliver value to your organization and hop on board – all the hard work has already been done in setting it up.
Get started today
Worldwide, most of the top organizations have already realized the potential of blockchain technology – and it’s a matter of months, not years, before it becomes embedding into mainstream processes. If creating your own chain seems unrealistic, then the best way forward is to use Blockchain as a Service. Not only does this give you access to an independent and expert technology partner, but it provides a much faster and more cost-effective way to start realizing the benefits of blockchain technology.
To learn more about Blockchain as a Service or to request a free assessment to discuss potential blockchain use cases for your organization, contact Nihilent today.