The adoption of blockchain technology, while on the rise, is still far from the mainstream. For many, blockchain is still synonymous with cryptocurrency. This is a very narrow idea that doesn’t even begin to appreciate the true power of decentralisation.
Enterprises can derive many benefits from the adoption of blockchain in their development plans. Companies can transform, disrupt, and evolve through the use of this technology.
Here are the top 5 reasons why enterprises should care about blockchain.
- Digital infrastructure will need to be blockchain-enabled
- Data monetisation through blockchain-provided systems
- Engagement with machine customers using blockchain solutions
- Business model transformation through programming monetary exchanges
- Development of new, decentralised governance ecosystems
1. Digital infrastructure will need to be blockchain-enabled
The world is growing increasingly interconnected. From smartphones to cars, from airports to factories, and from small appliances to cargo ships, always-on connectivity is a reality today, and will only become more widespread as the Internet-of-Things (IoT) concept takes hold. Once the push for decentralisation gains momentum, legacy structures will become outdated and be relegated to the past.
A perfect visualisation of a large-scale, blockchain-enabled digital structure is a smart city. Businesses city-wide can form networks of trust where customers can use their digital identities to interact and transact quickly and seamlessly, and always in a private and safe environment.
The advantages of blockchain technology, when applied to the development of smart cities, are far from restricted to retail businesses. Urban development can rise to a new level: lighting, charging stations, even parking meters, emergency points, and essential services can be powered by blockchain technology and digital identity frameworks. In this trust ecosystem, a citizen can interact with the environment much more efficiently than before.
2. Data monetisation through blockchain-provided systems
Data-driven marketing is one of the key assets for commercial departments worldwide. By analysing market trends, demographics, customer behaviour, and many other factors, companies can run customised marketing campaigns offering products that are relevant to what the customer wants.
Blockchain technology is a win-win for customers and marketers. For the former, they can be sure that their data remains private, secure, and immutable thanks to blockchain’s cryptographic algorithms. And for the latter, because blockchain transactions are transparent, marketers can better measure the effectiveness of their campaigns, and fine-tune them if necessary.
The use of blockchain technology for data management is not restricted to marketing. Blockchain-enabled solutions can in fact support a great diversity of use cases. For example, NetObjex, in partnership with the Brooklyn Public Library, have tested a data capture system to boost customer engagement.
3. Engagement with machine customers using blockchain solutions
Traditionally, we perceive machines as objects. As the wise Obi-Wan Kenobi once said, this is true, from a certain point of view. But technology and connectivity have evolved to a point where some objects are not just things. They are machine customers. This is a fascinating concept that deserves further explanation.
Marketing departments have been selling stuff to people for many centuries now. A person sells something, and another person buys it. This has been the cornerstone of the buyer-seller relationship for the longest time. But the advancement of technology is gradually introducing a new paradigm: the machine customer, an AI-driven assistant to help humans make purchasing decisions.
Digital marketing has been around for quite some time, but it truly exploded with the advent of portable smart devices. Nowadays, anyone can buy almost anything from almost anywhere in the world, at any time. With the help of algorithms, marketers understood what people wanted, and this was presented to them through the screen.
Things are stepping up a notch. People increasingly rely on assistants like Alexa to help them to buy stuff. And herein lies the crux. Alexa is now more than just a thing that tells the time or answers silly questions. Alexa is now a customer that can be targeted on the human’s behalf.
It goes far beyond Alexa. Smart vending machines can automatically contact a supplier when items run low, and a built-in algorithm can decide which products sell well, and which ones don’t. In other words, the machine makes the decision on what to dispense to customers. The vending machine, in fact, becomes the customer.
Blockchain can become an integral part of such a system, in the context of a smart city environment. Blockchain-enabled supply chains could track every product, from manufacturing to destination, and ensure traceability. DIDs could be used for authentication of delivery drones, and to guarantee the safety of machine-to-machine communication.
4. Business model transformation through programming monetary exchanges
Technological innovations affect most aspects of life. From the way we communicate with each other, to the vehicles we drive, our entertainment systems, aeronautics, and a myriad other things. Blockchain is one of those innovations that is now starting to make a difference for many industrial sectors. In the financial realm, for example, Gartner describes a programmable economy, which it defines as the many revolutionary changes that happen in the world’s financial realm thanks to technology.
More specifically, programmable economy focuses on new ways of value exchange. Evolving from fiat, government-backed currencies, a new way of making payments is emerging, facilitated by blockchain. In this new model, individuals, through the use of smart devices, regulate the payments, which are done in a peer-to-peer fashion. This can generate novel business models and applications worldwide.
Programmable economy, while not a reality quite yet, is likely to become a prominent concept over the next decade.
5. Development of new, decentralised governance ecosystems
Traditionally, governance systems have been highly centralised. Banking institutions maintain a tight hold on financial systems, so citizens have had little choice but to use banks as financial agents. Banks know this, and so the banking cartel has enjoyed almost total control of a nation’s monetary environment.
Enter blockchain, the ultimate disrupter. In this new paradigm, the power of governance shifts from a centralised entity to a decentralised one. Suffrage and decision-making powers are no longer exclusive to a small circle of individuals. With blockchain, everyone is a stakeholder in the system.
On-chain governance facilitates the encoding of rules and regulations into the blockchain protocol itself, and these rules can be enforced and executed through smart contracts. Once deployed, developers and other network participants (rather than any one single entity) can propose changes and alterations to the protocol and the network through a voting mechanism, for example. The decentralisation of governance introduces fairness and trust to the distributed system, as participants have a financial incentive to do the right thing and maintain and evolve the blockchain ecosystem.
So far, decentralised technology has shown the potential to create new paradigms for a great diversity of business sectors. We have discussed five reasons why enterprises should care about blockchain. Blockchain can overthrow centralised systems. It can bring financial freedom to millions. It can create self-governing ecosystems and global financial frameworks where every peer is just as important as any other, with no central entity regulating otherwise.