Future Commerce Block-talks
Welcome to Industrial Revolution 4.0. Take a seat as we take you through some of the wildest concepts that are up and coming in the future of commerce. Food for thought - how are you preparing your organization to slowly do the change management from the old silo-ed technologies you have to the new wave of future commerce technologies?
If you are at least having a feasibility study, or thinking of putting a team together to investigate further opportunities in blockchain, you are doing one thing right. Blockchain will play a vital role in future economic transactions. Some contest the value of blockchain in other domains except financial, but this topic I will keep for later posts.
Blockchain is the key underlying infrastructure upon which bitcoin (a cryptocurrency) was build. To have futher background on blockchain, have a quick look at this awesome TED talk by Bettina Warburg. She talked about "New institutional economics" - like bribary and rules like constrains and non-conformities like bribary - with these in place, how can one put their hands on "certainty".
A lot of the companies that are investing in prototypes investigating various blockchain technologies. As soon as these prototypes have proven their value, a big question about technology landscape and its environments will rise: how to handle security and data privacy in blockchain infrastructure itself? Blockchain is an open infrastructure. This becomes especially relevant given the nature of the blockchain: a trusted, distributed and inter-organizational database (ledger).
Key opportunities of blockchain infrastructure lies in the distributed ledger concept. This will ensure end to end traceability of data origination to the data receipt. However, at these edge nodes (which is actually the physical material nodes) there are no checks. Concerns can be raised as to how to prove that the person receiving physically the transaction is actually the person we intend to.
Adopters of blockchain technology will be quick to state that proven cryptocurrency security standards will bring the solution, but that is only half the story. If you are really preparing production environments you will also need to consider various aspects of end node security, public and private key storage policies, which user will have which permission grants, how many times will you make audits on your data, how will third parties interact with your data etc.
Some other challenges also include regulation and governance. Governments are not yet adept to have the insight on how blockchain policies and regulations should be implemented. Regulators have struggled with advancement in technologies. Blockchain technology can be an added layer of burden that regulators need to solve.
Consequently, banks are going to be challenged by an already existential problem with the current technology landscape in these banks (which are 10 – 20 year old) and between serving the on-going transactions on top of these regulatory requirements.
Quoting from Techcruch on what will hamper banks going forward:
Quite simply: bureaucracy.
Lawyers, compliance, front office, back office, middle office —
enacting meaningful reform, or even getting budget to expand
a technology program, could require sign-off from all of them.
Quite simply put, the hype of blockchain is at its peak and then it will go through a trough of disillusionment.
Now, I don't want you to get the impression that once we solve these concerns, the blockchain is going to be the solution to everything. Maybe one day as Bettina said, it may end counterfeit drug problem and potentially save rainforest. Truth is, we will be seeing a lot of experiments take place and probably fail before we truly understand all of the use cases for our economy. Some say this technology is like a solution looking for a problem. But there are tons of people working on this, from financial institutions to consortiums of institutions, to startups, research corporations etc. And one of the reasons is that it's not just a future commerce capability, it is a complex technology and a truly potentially disruptive innovation in the 4th Industrial Revolution: the Digital Revolution.