Two years ago, theWorld Economic Forum(WEF) reported that government use of blockchain is expected to reach a tipping point by 2023. Fast forward to early this year whenHarvard Business Reviewalso shared “enthusiasm for its potential” while noting that blockchain transformation in government and business “is still many years away.”
There’s certainly a lot of focus on the magnitude of impact from cryptocurrency and blockchain. There’s also hype about these emerging technologies, particularly with frequent recent news coverage of ICOs (initial coin offerings) and the fluctuating worth of Bitcoin.
Cryptocurrency and blockchain are inherently secure due to their cryptographic nature. Except it’s worth noting that there have beencryptocurrency security breaches.
A quick primer
Bitcoin started the cryptocurrency craze in 2009 as an alternative digital currency to make encrypted transactions outside existing centralized financial and economic systems. More alt currencies have since sprung up, including Ethereum, which offers “smart contracts” capability. Blockchain is a distributed ledger of all transactions stored across a decentralized network; the records are shared peer-to-peer, so nothing can be changed, only amended with new transactions recorded in new blocks. Here is aquick and helpful video overview.
Reimagine business processes
Can these technologies help you build a secure digital business now? Blockchain is immutable, secure, and consensus driven – and not purely for recording financial transactions. It’s emerging as the foundation for revamping or redesigning business processes for many applications, including IoT solutions. Indeed, companies have begun trialing blockchain and decentralized applications (dApps) inbanking,financial services,energy, andhealthcare.
It’s worth considering as you provide technology strategy insights for your company’s long-term digital transformation. How will your business rethink processes with suppliers, partners, and customers to drive efficiencies and cost effectiveness?
Microsoft is among those leading blockchain technology innovation with itsBlockchain as a Serviceon Azure,Coco Framework, and recent update for Bitcoin Currency Support inOffice 365. Protocols might need to be adjusted or newly created to deliver enterprise requirements like performance, confidentiality, governance, and scalability. Other challenges include the need to grow the network beyond early adoption, use programming language for development of dApps smart contracts on Ethereum, and address the energy-intensive process.
Governance, legislative, regulatory, and organizational development efforts will take time to agree on and implement for how businesses, organizations and individuals effectively conduct commerce worldwide with cryptocurrency and blockchain. As HBR points out, “it will take decades for blockchain to seep into our economic and social infrastructure.”
What do you think?
Is this technology useful for securely digitizing your organization’s processes? If you were to pilot the technology, would your first step be to offer customers a decentralized cryptocurrency payment option – or to revise a business process? Did you check out one of the Azure blockchain sessions at Ignite? Let us know – share your insights!