Blockchain and Distributed Ledger
One of the fundamental shifts to the internet and computing is the adoption of blockchain and Distributed Ledger Technology (DLT). They are subtly different but let’s just simplify this “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’re going to focus on the high-level business side. To our team, it is a shared database 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 into 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 everything literally. 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 and Distributed Ledger?
Simple – if you’re not looking at your business and seeing where it may impact you positively or negatively, you are ignoring a significant shift that could destroy much of the value in your company.
What Are The Dangers of Blockchain and Distributed Ledger?
The number one danger we see is groups that simply “add blockchain and stir.” Blockchains for some technologies make sense, and blockchain is the utterly wrong technology to look at in other areas. Tread carefully here.
Where Should I Use Blockchain and Distributed Ledger?
This question is challenging as it can dive deep into detail and requires an extensive understanding. However, at the highest level, organizations should consider blockchain technology when:
- Information sharing is more important than hoarding – no business operates entirely independently.
- You currently own information that you shouldn’t – Every organization needs access to information that really belongs outside the organization. If you incur costs to own something that really isn’t your problem, then you can benefit.
The single most significant 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 identities? Absolutely not, but they think they do. They need to own the trusted relationship 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 a digital identity.
Now, self-sovereign identity has emerged, and companies can remove the risk and expense of “owning” all their customers’ digital identities and focus on building customer relationships.