One of Silicon Valley’s most compelling attributes is its lack of interest in the traditional bottom line. While most companies focus on revenue and profitability, Silicon Valley leaders tend to view valuation as a success barometer. Because of this mindset, Valley-based companies don’t mind taking significant risks as long as they help achieve big-picture visions. But we can learn from Silicon Valley about blockchain Adoption.
What is the Risk of Blockchain?
One new risk that has begun to pay off is blockchain, and non-Valley companies are taking notice. The International Data Corporation predicts that blockchain spending will reach $11.7 billion by 2022 and extend its reach beyond the tech and banking industries.
Who Embraces Blockchain?
Despite blockchain’s obvious applicability to several industries, it’s a solution that some leaders still haven’t embraced. Some of that hesitation stems from a confused association with cryptocurrency, which has good and bad connotations. Some, however, is because of blockchain’s perceived small impact on the bottom line. In 2019, however, blockchain’s potential value is becoming more apparent.
Most leaders who are aware of it are seriously considering its use cases, while more skeptical executives now find themselves much more open to investing in the technology. Silicon Valley drafted the blueprint for embracing blockchain — it’s time for companies beyond the Bay Area to take a risk and follow suit.
Clearing Up Blockchain Confusion
Similar to any emerging tech, blockchain comes with a slew of new terms and terminology that don’t necessarily mean a lot. People interested in creating unique marketing opportunities for themselves can take advantage of the buzzy nature of terms like blockchain, artificial intelligence, and big data. These buzzwords enable them to peddle products or services that don’t really do anything new — or don’t actually exist.
Misinformation is floating around, and C-suite executives are understandably dubious of new technology.
Because so much misinformation is floating around, C-suite executives are understandably dubious of new technology and hesitant to embrace more modern solutions to old problems.
To get a better sense of blockchain’s value, leaders must understand the truth regarding several common misconceptions:
• It’s the same as bitcoin.
While blockchain is essential to how cryptocurrency works, it’s worth doesn’t begin and end with bitcoin. At its core, blockchain is a decentralized and secure way to keep digital records. A blockchain consists of different “blocks” of data that are connected to others using cryptography, creating a string (or chain) of information stored on a variety of computers.
What puts blockchain over traditional methods of business logging is its transparent and immutable nature. It can’t be tampered with or changed, and every block can be accessed and viewed. Protection of the block creates a clear and complete line of accountability, which is useful for more than just creating money.
• It replaces relational databases.
Because services like SQL Server and Oracle cover similar territory as blockchain, some people assume it’s meant to replace more traditional relational databases. However, blockchain platforms are still mostly nascent and aren’t intended to replace more entrenched solutions. Blockchain exists as more of a complementary option.
• It gets rid of the middleman.
While it’s true that blockchain has enabled Bitcoin to eliminate intermediaries from its transactions, that’s not the case in other applications. As long as transactions remain in an internal ecosystem, they don’t require outside validation. When it comes to interacting with the world at large, however, intermediaries can still help with data input and identity verification.
• It’s just a public peer-to-peer system.
The big selling point of many blockchain implementations is the public nature of each transaction. This transparency has led many businesses to believe that blockchain can only exist in a public setting — or that creating a permission-reliant application isn’t possible. While that’s currently the most common version, blockchains do not have to be open to every participant. They can be limited to only those who need to know certain information.
Like any new technology, the success or failure of blockchain’s adoption rests in its applications.
Executives need to look past the marketing jargon and flashy promises that make blockchain look like a messy tech fad.
They must instead figure out their own core goals — and then decide whether blockchain can help them reach those goals faster.
Blockchain’s Place in Today’s Business Environment
For businesses, one benefit of Silicon Valley’s risk-taking nature is that it allows others to learn from its successes and failures. Here are a few ways that blockchain already has proven its worth:
1. Coordinating Document Control and Third-Party Sharing
Despite its reputation as a publicly distributed solution, blockchain is a perfect way to securely share information without risking it getting into the wrong hands. In industries such as healthcare, where security is paramount, this could be a game-changer. It gives the right people easy access to comprehensive data with significantly reduced security risks.
2. Partnering With AI to Improve Oversight and Insights
In traditional workspaces, databases often turn into data silos — centralized sources that are hard to share across departments or between companies. Blockchain, however, should be shared with those who need it as a perfect universal repository for businesses or entire industries.
This sharing is critical not only to better communication but also to better data insights. As more information is gathered and shared, machine learning gleans patterns from these findings. Furthermore, what might not be apparent to one expert could be evident to someone who has different skills or knowledge — enabling outside-the-box thinking that is not possible with data silos in place.
3. Improving Sourcing With Customer Data
Because blockchain is so easy to distribute securely, collaborators can readily collect, read, and analyze information from all over the globe. When it comes to identifying which vendor produces the highest-quality product, data from customers can give accurate insight into which direction to take.
4. Predicting Equipment Maintenance Patterns
Platforms such as TMW Systems offer solutions that use blockchain to alert companies when something goes wrong. They also collect data about each occurrence. Allowing companies to understand when and why pieces of equipment fail can save capital and time in the long term.
Blockchain is no longer a technology best left to the inhabitants of Silicon Valley.
There are specific use cases that any business can put into place, and blockchain is no longer a technology best left to Silicon Valley. For executives, it’s no longer enough to wonder whether you should consider blockchain — you should already be figuring out how to best put it to use.
Image Credit: jorge-fernandez-salas-f5OO7rL6OD8-unsplash