One of the fundamental shifts that has happened to the internet and computing is the adoption of blockchain and distributed ledger technologies (DLT). They are subtly different but let’s just simplify this whole “is it a blockchain or DLT?” debate for now.
We’ll call it all blockchain until we get down in the weeds.
Because everyone is talking about blockchain.
What Is Blockchain?
We’re not going to get into the computer science level detail here.
We’ll focus on the high-level business side. To our team it is a shared database – a place where many different parties can read and write data. With a couple of unique things:
- It can’t be changed – Once something is written to a blockchain it can’t be changed. I can’t say that I didn’t sign something because it is there for all those that are authorized to see. I may revoke something, but the original piece and my revocation will be there.
- It can be proved – the parties running a blockchain all do amazing cryptography to ensure that what was written is exactly what was intended. The time it was written and the contents are there. Forever.
- It can be shared securely – We can bring partners and even competitors in to a system. We don’t have to own all the aspects of the system.
- It limits what others can see – Blockchains aren’t about sharing literally everything. It may just be a way to say “here I am – and here’s how to reach me” or it could have deep details (e.g. smart contracts that automatically execute) built in.
Why Should I Care About Blockchain?
Simple – if you’re not looking at your business and seeing where it may impact you positively or negatively you are ignoring a major shift that could destroy much of the value in your company.
What Are The Dangers of Blockchain?
Number one danger that we see is groups that simply “add blockchain and stir”. There are blockchains for some technologies that make sense. In other areas blockchain is the completely wrong technology to look at. Tread carefully here.
Where Should I Use Blockchain?
This question is tough as it can dive deep into detail and requires an extensive understanding. However, at the highest level blockchain technology should be considered when:
- Information sharing is more important than hoarding – no business operates completely independently.
- You current own information that you shouldn’t – Every organization needs access to information that really belongs outside the organization. If you are incurring costs to own something that really isn’t your problem then you can benefit.
- The single biggest set of information that is sitting in the wrong place is digital identity. Companies “own” their customer’s digital identity, which makes little sense as that ownership comes with very high expense and very high risk (think of all of the breaches). Do they need to own their customer’s digital identity? Absolutely not, but they think they do. What they need to own is the trusted relationship that they establish and build with their customer. That is a totally different thing. However, until blockchain technology appeared there was no way to get rid of owning digital identity. Now, self sovereign identity has appeared and companies can remove the risk and expense of “owning” all their customers’ digital identity and focus on building relationships with customers.