Blockchain and Businesses

In a very simple definition, Blockchain is a distributed ledger that record  the history of transactions.

Blockchain because of its property like immutability, transparency and security have attracted the eye of the whole world. But adopting blockchain is not merely a technical decision, it also depends on the business decision.

There are lot of advantages of adopting  blockchain technology in business:-

1. It will reduce Operation cost.
2. It will remove intermediaries.
3. Increase the efficiency, productivity and reduce time lapse.
4. It will help you in securing digital information.
5. Allows you to write Smart Contracts.
6. There are immense possibilities which entrepreneurs and researches  are still exploring about it.

As per the study of Santanderinnoventures.com,  distributed ledger technology could reduce bank’s infrastructure costs attributable to cross-border payments, securities trading and regulatory compliance by between $15-20 billion per annum by 2022.

There is a report published by Accenture which says that blockchain based data system could reduce cost and

1. Cut 70% on Central Finance reporting.
2. Cut 50% on business and Central Operations.
3. Cut 50% on compliance.

Cointelegraph Author Joseph Young in 2017 wrote that Bank of England and its researchers are actively working in developing a solution using Blockchain technology for payment settlement and cross border transactions. As per the reports, it can help banks in savings $10-$15 billion per year.

As a decision maker of an organisation or a business, it’s really very important not be intrigued by the hype to adopt blockchain for every use cases.

Great use cases solve real problems at a cost which is really lower than adopting  the technology.

There are three main types of Blockchains, Public or permissionless, private or permissioned and Hybrid or Consortium. Each having different objectives and meet different requirements.

Let us tell you the questions you should ask yourself before adopting blockchain technology for your business.

1. Is your business removing any intermediary ?

The motive of Blockchain has been realised as removing of middle-man whose role is to act as a trust party between customer and the client in the system. They play the pivotal role in communication because of the lack of trust between two parties. For an instance, if  you want to transfer any money to your friend then you can only transfer through bank or any intermediary service provider like Paypal, American Express, Western Union,etc but anyhow you are dependent on a third party. There is no mechanism of peer to peer transfer because of lack of trust and confidentiality.

But Blockchain is a tool that gives you an authority to connect with anyone directly without involving any intermediary. It allows you transfer digital information to any one without involvement of a third party.

As a business leader, its the first step you should think before inculcating blockchain in your business will remove any intermediary and what would be the cost benefit after technology upgradation.

2. Are you working with digital currencies or assets ?

The use of Blockchain started with the cryptocurrencies like Bitcoin, Litecoin, Ethereum, Monero, etc. Cryptocurrency or a tokens can represent the physical asset or a digital asset in your business.If you are not dealing with any kind of digital asset then it would be difficult for you to include blockchain in the business because tokenization is an important aspect of it.

3. Can you create a permanent authoritative record of digital asset in question?

This simply means whether you require any change in your data after its fed into the blockchain because it’s impossible for you  to do any change in the data. This property makes blockchain tamper proof and secured.

4. Do you require High throughput?

Throughput is all about output or transactions per second(tps) in case of blockchain. Right now blockchains are not capable of handling high throughput. Current blockchain like ripple is capable of handling around 1400-1500 tps. While Bitcoin handles only 7 tps and Ethereum handles just double of it. These throughputs are even less than the Visa processors who handles more than 1500 tps and some Asian Telecom companies handles lakhs of transaction messages per second.

So you need to check your business process flow or cycle time which will make you understand the design of your blockchain’s tps.

5. Do you need permissioned functionality?

This function allows you to select private blockchain. If you want access to the authoritative function then you should go for private blockchains which is must for the businesses and enterprises. Hyperledger provides you an opportunity to make your permissioned blockchain with various tools using most common programming languages like Node.js, Python, php, etc.

6. Do you need your transactions to be public?

If you want your transactions to be public and unauthorised then you can choose any public blockchain like Bitcoin, Ethereum, Stellar or you can also build a new public blockchain. Generally, businesses don’t prefer public blockchains because they need shared write access in them.

Here below is the list of Companies & Institutions who are using and exploring blockchains:-

1.American Express:-  American Express has applied for the patent for its blockchain based Customer Reward Program. It will distribute cryptocurrency as rewards and will accept  Ripple for getting payments from clients based in US to UK branches.

2.Met-life Incorporations:- The insurance company is going to launch a smart  insurance platform in partnership with Majesco and IBM. It will help in reducing the operation costs and provide better service to the customers. It will enhance the customer service to the existing customers and also help in finding new ones using the driven data.

3. IBM:-The tech giant has developed Hyperledger Fabric which is the most accepted blockchain enterprise solution. IBM is working collaboratively in other Hyperledger products also.

4. Goldman Sachs:- The bank is planning to launch a crypto trading platform.They have also invested in Cryptocurrencies.

5. Siemens AG:- Siemens has came up with a unique idea of distributing solar power using Blockchain.

6. Nestle:- Nestle in collaboration with IBM is using blockchain in supply chain and reducing middleman from the system. Nestle has joined the global food industry consortium for harnessing blockchains in food industry. Walmart, IBM, Unilever are already a part of this consortium.

7. Walmart:- Initially, Bitcoin Magazine reported that Walmart is working on blockchain for increasing efficiency in its supply chain management. Finally, Walmart and IBM have collaborated for tracking of food items from source to the stores in U.S. and China. They have tested it and found that tracking of mangoes from farm to store have magnificently reduced the time from weeks to only 2-3 seconds.

8. Microsoft:- Microsoft has developed “Azure” platform which is a workbench  for development of blockchains. It provide tools to the developers to work on distributed ledger technology.

9. Toyota:-  Toyota research is working on a use case where automobile makers can purchase driving data from car owners so that they can use that data into machine learning algorithm.

10. Royal Bank of Canada- RBC is working on a Blockchain Project named as “Project Jasper”. They have collaborated with Ripple company, for making solution of cross border payments.

This list is unending like the Blockchain’s use cases. You can explore blockchain as per your business requirements and its process.

In India, we at Plebiscite IT Services Pvt Ltd  are trying to help budding entrepreneurs in understanding blockchain and also developing the platforms as per the need of our clients.

For any help required, please contact us at [email protected]