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Grow into a major player in the global blockchain space with an innovative mindset.
The concept of a digital economy has rewritten business models you’ve adopted so far. Over 90 percent of organizations want a digital transformation strategy, anticipating cost reduction, increased innovation, and business growth in the future. It doesn’t matter if you are talking about products, services, technology, culture, or data; everything revolves around delivering value to customers and thwarting competitors.
And the booming blockchain technology has quite the same objectives.
With the technology still being in its infancy, people are unsure about how to make inroads. This post aims to convince the reader that whether it is a city, an organization, or an individual, an innovative mindset seems to be the answer to adjusting course and deriving maximum value.
What is blockchain technology?
An open, decentralized database that keeps a record of all digital transactions across a peer-to-peer network—that’s blockchain. All members with access to the network can view and validate the transactions using cryptographic keys, without a third party, such as a bank. The computers in the network are called nodes. This shared database with a secure audit trail is hard to tamper with. Blockchain is expected to tackle challenges such as duplication and control of information.
To understand how blockchain works, watch this great video from IBM using the diamond industry as an example:
How can your company start implementing blockchain?
If you’ve decided that using blockchain will expand frontiers for you, then what next?
According to Deloitte, there are six key steps for companies to get started with blockchain:
- Inspiration (interact with think tanks or labs like MIT Media Lab)
- Education (gather information about practical implementation)
- Ideation (generate ideas, categorize, and prioritize)
- Collaboration (test and refine ideas with leading industry people)
- Prototyping (create a rapid or breadboard prototype)
- Implementation (critical, testing and validation phase)
Studies show that it doesn’t matter whether a country or a company wants to leverage blockchain, an entrepreneurial and innovative mindset is a key prerequisite. Ideation is a crucial step, where you can expect action when your ideation is effective. Get engaged employees to improve the existing capabilities or discover new possibilities using blockchain to unlock new use cases.
To make innovation in this space happen, companies typically look for implementation of ideas within or partner with vendors. Budding blockchain startups in the fintech ecosystem need backing in terms of capital, skills, mentorship, and infrastructure. Whereas, legacy companies tie up with accelerators to better their impact and reach. BFSI institutions and other firms are forming alliances, sponsoring innovation labs, and creating incubator programs on several platforms.
Scott Robinson from Plug and Play, a startup accelerator and open innovation platform, says that accelerators, incubators, and hackathons “show very quickly if a use case is something that makes sense for large corporations and they paint a pathway to matriculate the technology into the [legacy player’s] tech team.”
Many banks and other financial institutions are using hackathons to explore this emerging technology. Also, blockchain companies are struggling to encourage widespread adoption, especially when trying to reach the management of incumbents. Startups that are blockchain enthusiasts find that hackathons can give them that much-needed access to corporates in the financial domain, and the latter can work with these experts to make the most of blockchain. Companies also participate in hackathons for the wonderful networking opportunities they offer.
A hackathon, which involves all the six steps Deloitte talks about, is a great tool to discover talent and develop breakthrough products or services. The highly focused event leverages an innovative mentality and the right skills to augment the value chain. Crowdsourcing ideas from developers could be the only way for now to find financial solutions using this potentially disruptive technology.
Chainhack, Dutch Blockchain Hackathon, Blockchain Virtual GovHack, Hyperledger Hackathon, and Consensus are a few popular hackathons that drive home the point that Ishmael Malik, CEO of Blockchain Lab, makes: “Blockchain and Hackathons are poised to redefine the entire tech innovation lifecycle, accelerating by orders of magnitude technological progress.”
Then there is ether.camp (a recurring virtual hackathon), which “is a project aimed to create the ideal innovation environment for startups by utilising blockchain technology for the release of the Virtual Accelerator.”
Malik adds: “The future of such Hackathon-led innovation as highlighted by IBM and Intel in relation to the HyperLedger Hackathon, illustrates the ability for such a format in harnessing, showcasing and market testing new advancing technologies. Furthermore, it allows for previously untapped hacker skill sets to form into teams and generate innovative new ideas and products.”
Why now is the time to explore and invest in blockchain
This foundational distributed ledger technology is a mini-revolution all right.
Blockchain researcher Bettina Warburg says in her great TED talk, human beings keep trying to lower uncertainty to exchange value. Just as formal institutions such as banks or governments do according to American economist Douglass North. And just as blockchain technology will transform our economy by reducing uncertainty in not knowing who you are dealing with, not having visibility into a transaction, and not having recourse...to an extent.
Once you have understood the applications of blockchain and its implications for your business, you need to explore its potential and find a challenge that can be solved. That is, identify a use case → build a proof of concept → do a field trial → roll out.
Asset transactions are immutable and secure, and this opens up several avenues for innovation, either in the underlying technology or in the possible use cases of the technology that were previously unfathomable. The possibilities are limited only by the imagination as of now. (Read about some interesting things you can do with blockchain here.)
Accenture predicts that the adoption of blockchain by the financial services sector will be in the growth phase from 2018 to 2024 and by 2025, it will hit maturity. Capital market spending on this technology, which was $30M in 2013, is expected to touch $400M by 2019. While Gartner says a blockchain business will be worth $10B by 2022.
Although the adoption of this disruptive technology is growing, it will be some time before the fledgling goes mainstream. “But no doubt the application of blockchain will drive the fourth industrial revolution,” says Thomas J. Carroll, Avant Global’s Chief Information Officer. Eventually, innovative solutions will emerge to tackle the scalability, security, interoperability, and privacy issues of blockchain.