Why Executives Need to Understand Blockchain
If your understanding of blockchain is limited to its use in cryptocurrencies such as bitcoin, you could be missing out on a tremendous business opportunity. Blockchain technology can make key business procedures transparent, faster and more secure.
In fact, it’s not an overstatement to say that technology may unleash a productivity boom that will reorganize the competitive dynamics of many industries.
Companies with a well-defined blockchain strategy could see their operating costs lowered while extracting more value from their assets. Enterprises, meanwhile, that take a wait-and-see approach may struggle just to keep their market share, according to an article published by Concannon Business Consulting.
A blockchain is a database structure that links blocks of data in such a way that modifying or reordering the blocks is virtually impossible. Generally, any party given the right to interact with the database has full access to all the blocks in the chain, as well as the data within them.
Modern protocols have made it prohibitively expensive for any party to subvert the integrity of a blockchain. Public blockchains leave networked participants out in the open, which makes it easier to trace any attempt at bad behavior.
These improvements also allow business transactions to be executed faster and with more transparency, leading to improved trust.
Using blockchain, businesses can send and receive payments through a system that is both transparent and tamper-proof.
This means there will no longer be any use for most financial intermediaries, such as brokers and agents. And because all actions related to a specific contract are recorded on a blockchain, the cost of tracking and reconciliation can also be reduced.
For instance, records management is key for heavily regulated industries such as healthcare and shipping. Such processes can be managed through a single blockchain rather than using multiple storage systems that don’t always communicate well with each other.
View From the Executive Suite
Sean St. John, a Toronto banking executive and vice president at National Bank, believes that blockchain could fundamentally change the financial sector, improving efficiency and making it more resilient.
“It’s still in the early stage of development, but blockchain technology has the potential, I think, to streamline all kinds of processes: origination, securities settlement, interest rate payments, and more,” Sean St. John said in a recent interview.
More Than Just Theory
The industry’s first blockchain solution was based on the Hyperledger Fabric and was built by tech giant IBM along with Maersk, a transport and logistics company.
This particular blockchain was made available to the entire shipping and logistics industry. The solution is built to manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process from end-to-end to enhance transparency and share secure information among trading partners.