Blockchain has revolutionized many industries—and is poised to do so again. We’ve seen it happen with smartphones, the cloud and digital disruption, the tech industry itself being among the first disrupted. Now proponents say it’s time to prepare for blockchain’s second shift: from something with greater control but little transparency, to something extremely decentralized and highly transparent.
Business before blockchain
Since the early nineties, most industries evolved organically, growing using new technologies, accumulated knowledge and intelligence as there was an increasing need for goods and services on a global scale. However, the increase in complexity that resulted led to an unprecedented number of policies and procedures. These quickly grew burdensome, stifling the creation of new business models, competition, and innovation by creating almost inextricably bound partners and customers. Every industry, from banking and finance, to healthcare, to education, has been shackled by ways of doing business that ended up inseparable from the industry, like the marbleized fat in a pound of ground beef.
This approach served the industry giants exceptionally well, since it made entering their markets (and threating their leadership) nearly impossible without significant capital investment from the outset. At the same time, it created a well-oiled mechanism of aggregators, third parties and regulators who were responsible to not only keep the world aligned to what regulations required, but also to make sure that things would work only in certain ways –ones that were able to address the interests of each side involved on any kind of transaction.
That was also part of the well-mapped, step-based, linear approach to everything. This mechanism was good enough to make things work, operate, function, and stay secure so that a promise or a deal in such a complex environment would be kept.
Ushering in a new era of doing business
Today things are moving much faster, from something non-linear to an agile, context-driven, transactions-led situation. Connectivity enables that, and creates the ecosystem to support interactions without the involvement of any third parties. Blockchain (and how we are going to use it) is about re-writing the way synapses happen across various elements of the ecosystem.
Blockchain is triggering a massive wave of change in the technology industry — and many others — because the technology records transactions in a way that enables it to automate trusted activities among digitally-networked peers.
Should it succeed the way inventors, entrepreneurs, or large institutions are envisioning, Blockchain technology has the potential to streamline and accelerate business processes, drive the efficiency of old business models to new levels, allow us to create new business sectors and ways to exchange services and exchange, increase cyber security, and reduce or eliminate the roles of trusted centralized authorities. As a result, our ways of doing business will completely take on a new shape.
Blockchain will introduce new business ecosystems
Blockchain will change how we build the infrastructure that supports our interactions, our expectations from software, and the toolset we have available to us. Legacy infrastructures will be abandoned and IT investments recalibrated. Currently, we transfer services and products on the cloud, but blockchain will help make this transition faster, much more efficient, cost effective, and more reliable and transparent than ever.
Blockchain is about to become the main way to transfer signals, make transactions, create value in an ecosystem-driven world. New business ecosystems are based on the new synapses that blockchain will allow us to design, deploy and run. The new term ‘business ecosystem’ reflects what we already know: that all organizations are part of an ecosystem of customers, partners, suppliers, regulators and competitors. But haven’t businesses always been part of an ecosystem?
Yes, but an ecosystem can be organic, meaning that it just grows haphazardly and opportunistically as the market grows, like locusts wiping out their own food supply. Old-fashioned ecosystems create large amounts of friction and inefficiency. New business ecosystems, based on new blockchain synapses, are about to work in a completely different way, where incremental innovation is dead, disruption happens fast (also due to lack of gate-keepers who act as bottlenecks, and the authoritarian walled approach of the involved third parties). These ecosystems’ elements (either people, or the machines) will be active synapses and creators, rather than passive elements that were responsible for receiving or carrying on doing any kind of transactions.
Expanding the IoT network and supporting the sharing economy
Blockchain — along with the cognitive computing – is becoming the critical factor that will drive the IoT evolution from countless connected devices to the creation of smart and self-serving ecosystems with emotional semantics.
Today, one of the most pressing issues surrounding IoT is cybersecurity. Blockchain might hold the answers to these security-related challenges, as it based on trust and the safety of the encrypted mechanism and algorithms.
Virtually every industry in the global economy is undergoing digital disruption that will change the value of their asset bases and capabilities. This major shift – from an asset-owning model to one where multiple involved parties and partners have to cooperate in order to provide the service or the product – is what defines the fundamental value of the blockchain.
Blockchain’s secure and virtually tamper-proof distributed ledger technology and automation capability can provide the platforms needed to bring new sharing economy opportunities to market.
How will we prepare for blockchain’s full effect?
The sheer scale of blockchain’s effect only compares to the global shake-up made by the Internet 20 years ago. Regulations must be adapted, services redesigned, and the way we understand ecosystems must be redefined.
We can expect new ways to request, pay and get paid for services we need or provide. At any scale. Whether we’re talking about the digital economy, governance, or digital transformation, blockchain will only help enhance the way we structure the world around us – from physical to digital, and everything in between.