The Transformative Power of Blockchain: How Will It Affect Your Enterprise?

I was interviewed by Oracle, and below is their article:

According to the World Economic Forum, 10 percent of the global gross domestic product (GDP) will be stored in blockchain technology by 2027. It has major implications in every industry: impacting how businesses are governed, how transactions are handled, and who owns the data they produce.

To understand how blockchain technology is specifically impacting the enterprise, we spoke with Mark van Rijmenam, widely considered one of the most influential blockchain experts. Van Rijmenam is the founder of dscvr.it and Datafloq, a faculty member at the Blockchain Research Institute, and author of the best-selling book Think Bigger. His book on blockchain for social good, Blockchain: Transforming Your Business and Our World is due out this August in English and Chinese.

Because our readers may have different definitions of blockchain, how do you define it?

A blockchain is a database in which data can be written and read but not edited and, as a result, you get data which is immutable. In addition, hash algorithms make data verifiable so that you can see it has not been changed. In addition, the data on a blockchain gets timestamped so that the data is traceable throughout the entire ledger. The three characteristics of data within a blockchain—immutable, verifiable, and traceable—really change the game. They enable us to create all kinds of new applications that weren’t possible before.

Can you talk a little bit about what kind of infrastructure would be needed to support blockchain projects?

From an infrastructure perspective, it all depends on the needs of the industry. In banking, for example, one of the challenges at the moment is that blockchains don’t have high transaction speeds. If you want to have a blockchain among a couple of banks, the institutions need to be able to perform high-speed transactions and, for example, the bitcoin blockchain is not capable of doing that.

Is there anything enterprises can do to put a technology foundation in place that would specifically support blockchain projects?

We have to find solutions for regulations which prohibit putting data in the cloud. That’s basically the same as the GDPR, which will affect enterprises all over the world. You could say that GDPR is in conflict with blockchain because it requires you to be able to delete your data and, on a blockchain, you can’t. Read my latest article on what organizations should do to make Blockchain and GDPR work together.

From an enterprise perspective, I think what’s important for organizations to remember is that blockchain technology is a means to an end. Not every problem requires blockchain. It’s predominantly useful when we collaborate with different entities. When there’s a transaction going on, and there’s a trust issue, that’s when blockchain comes into play. Organizations should look at the technology from that angle to see if it’s relevant to them.

Where the problem is processing and analyzing huge quantities of data, blockchain is probably not the answer but, rather, a specific big data solution. What are some examples of when blockchain technology would be appropriate?

For example, in the healthcare industry, all of a sudden, we can have tokenized, patient records on the blockchain. Because data on the blockchain is immutable, verifiable, and traceable, we know the records are true or correct. More importantly, these records will be owned by the patients in the future, and they will determine what or who gets access to the data and if the organization needs to be for access or not.

In the financial industry, you can track and trace where certain money came from. Similarly, in the supply chain industry, you have access to details about a shipment. For instance, if products were moved by ship, you can be certain that the temperature in the container stayed below four degrees Celsius. And if it went above that temperature, you automatically pay less because the products might be damaged. Provenance is an important use case for blockchain, which can result in increased transparency, for example, in the retail industry.

You see the same applications of blockchain technology in the finance industry applied to the healthcare industry or the retail industry, etc. For example, you can trust people or organizations a lot more. The fact that you now can trace the life of a product or data creates transparency and trust because you know that it was owned by someone at a certain point and that it has not been changed.

For every application, there are different companies in each industry working on them, and I think that’s fascinating to see. It’s also amazing how people are collaborating on all these new applications and basically reinventing society.

What do you think the role of IT professionals should be as they’re trying to build out their strategy?

Blockchain is a new technology that all IT professionals need to understand, and cryptography plays a massive role in that. It really depends on what kind of background you have, but you need to be familiar with the different technologies that are being developed, and they’re growing rapidly at the moment. From a data scientist perspective, suddenly you have to work very differently with data to analyze it and use it. From a developer perspective, you should be aware of what’s happening in this world and be ready to change course.

Is there a tie between big data and blockchain?

Yes. In fact, I recently wrote a white paper on the convergence of big data and blockchain. The main thing that will change is who owns data, moving from centralized organizations that are using the data to the person or organization that created the data. Within this new paradigm, in order to use and analyze data, you need a different type of consent.

So the Facebook and Cambridge Analytica problems that we experienced recently will hopefully disappear when the data from social media platforms is owned by the end user who then determines what others can have access to. For example, users might offer a platform access to certain pieces of data for free and require a platform to pay for access to other types of data.

Blockchain technology has some real implications for governance. What does that mean for enterprises?

With blockchain, governance is embedded in the code, thanks to smart contracts. For example, if you fund an organization and certain milestones are hit, extra funds become available. That can be done in any type of organization. And you have to ensure these contracts are done correctly because, once on the blockchain, they become immutable. You can change parameters, but you can’t change the contract itself. So, from this perspective, blockchain has a real possibility to make governance more transparent.

Are there other future applications for blockchain that are just wild ideas right now, but may actually come to fruition in the not so distant future?

One area I’d like to focus on is the use of blockchain for social good. Especially at the moment, a lot of people think of cryptocurrencies as criminal and blockchain as financial, but blockchain also has tremendous possibilities to be used for good.

For instance, there are about 1.5 billion people who don’t have an official government-issued identity and 2 billion people who are unbanked. These are problems that blockchain can help solve. If you don’t have an identity, you can’t get a bank account. If you don’t have a bank account, you can’t get a loan or prove the ownership of your house, and you remain in poverty. We can use the technology to help remove poverty, reduce the effects of climate change, get rid of fraud, improve fair trade, and improve democratic systems. Yes, blockchain will improve our business, but it will also improve our world if we use it correctly and that is exactly what my next book is all about.

This article originally appeared on Oracle.