What is blockchain and how can it transform your business?
You’ve probably been hearing a lot about blockchain, and that’s because it’s big. Blockchain will disrupt whole industries and offers exciting opportunities for forward thinking businesses who adapt quickly. So let’s look at what blockchain technology is and why it’s potentially so transformative.
Bitcoin and other cryptocurrencies like Ripple and Ethereum allow parties to securely and cheaply exchange funds worldwide without the need for an intermediary like PayPal or Visa. Blockchain is the technology underlying these currencies. It’s a digital ledger that records information in a publicly verified, traceable way across a decentralised network. Transactions are verified by peers (not central authorities), so the blockchain does not require a central authority to regulate it. Once a transaction - or block - enters the blockchain, it’s stamped, linked to other blocks and permanent. This makes it very difficult to hack.
It’s more than just safe payments though. Blockchain was originally conceived by cyberpunks as a way to reduce the power of financial institutions by removing their raison d'être. Trust, identity, value and title of property can be built into the code, so that parties don’t need a middleman to vouch for their ability and right to transact. Applications for this technology exist wherever there is an intermediary establishing commercial trust between parties, whether that’s a record company, a clearing house or an energy supplier. If your business is an intermediary, you stand to lose or gain based on how successfully you adapt. Here are some examples of how blockchain technologies are reshaping commerce:
Property ownership and intellectual property
Rights of ownership can be stored as blocks in a chain, making them legally indefensible. Metadata can be attached to content so that it cannot be shared or used without the permission of the owner. Kodak recently announced a blockchain based based initiative for photographers to control image rights. A global ledger of picture rights ownership will be accompanied by a managed licencing process, with photographers paid in ‘Kodakcoin’. Grammy award winner Imogen Heap has set up a rival to the traditional record company model that uses blockchain technologies. Mycelia is a creative co-operative that places metadata in content so that artists are credited and get paid directly in Ether when their creative output is used.
The sharing economy
Blockchain technologies can verify identities and values so that the middle man is cut out. The sharing economy relies on a central authority like Airbnb or Uber to ensure trust between parties. For example, Airbnb takes payment for bookings from guests, holds this in escrow and releases funds to hosts after the stay commences. With blockchain, parties could form peer to peer co-operatives and bi-pass the bodies extracting margins every time a product or service is ‘shared’.
Opening up the global economy to those previously excluded
Around two billion people don’t use formal financial institutions and one sixth of the world’s population don’t have a valid identity document. In many cases this is because the intermediaries that would normally facilitate these (governments) operate poorly. Blockchain could facilitate participation in the world economy for those previously excluded, opening up previously untapped markets for goods and services. The UN have recently been working on a blockchain based identity document that would operate exclusively of governments thus solving problems experienced by undocumented refugees.
Zoosh works with with forward thinking companies to achieve business success. We help our partners take advantage of the changing technology landscape. Talk to us today about how blockchain technologies can help your business.