Blockchain has become one of the hottest technology areas during 2017, so much so that today blockchain development ranks as the second most in-demand job skill, growing over 200 percent in the past year. We take a look at the crucial role blockchain is playing in digital business.
Blockchain began life as a digital ledger tool that was most commonly used for financial transactions. Today it is becoming increasingly well-recognized within consulting companies and has potential uses in other areas such as democracy, healthcare, smart contracts, insurance, wealth management and transport.
A technology whose time has come
The increasing volumes of sensitive data now being stored and transmitted through the cloud, calls for a secure solution like blockchain. Blockchain makes storing data more secure by creating a network of nodes, each of which store a copy of a particular database and are governed by a consensus protocol. Any change to the database must be agreed on by all of the nodes, and no single node has the ability to falsify information in the database.
Blockchain also requires an audit trail of all changes made, called “transactions”, and they make up the “blocks” in the “chain”. In summary, blockchain comprises three key elements. The first is a trusted, distributed, secure database; the second, a storage mechanism that runs on independent nodes; and the third, a technology that employs cryptography and consensus mechanisms to validate transactions and ensure the integrity of the data in the database.
Use case: a new, secure tool for democracy
Technology has had a massive impact on most areas of our lives. Travel? We now have Uber. The way we bank has been revolutionized by online payments that make life much easier. The way we shop has been transformed forever by e-commerce and particularly Amazon. But the way we exercise our democratic right has stayed largely the same.
Democratic, secure voting is a serious event, and even though most countries still use largely paper-based voting systems, digital voting using electronic devices is becoming more commonplace.
Security of digital voting, or e-voting, has always been a concern. With such major outcomes in the balance, the voting system’s security must be guaranteed and there can be no misgivings about its ability to keep data safe and to defend against potential attacks. Blockchain can provide that security.
Traditionally, databases have always been maintained by one single organization that retains full control of the database – including being able to amend (or tamper!) and delete the stored data. In the case of an election, as with financial transactions, the data being stored is so sensitive that something more secure than that is required. These single points of ownership are also big targets for hackers or malicious agents who want to influence an election. So it makes sense to ensure no single entity can access and manipulate a database – and one way to do that is to make the database public, and allow anyone to store a redundant copy of the database. The blockchain way.
Other use cases emerging
In addition to offering a smart, digital way forward for elections and voting, blockchain is being expanded to other industries.
From international payments to regulatory compliance and auditing, there are numerous examples of blockchain finding its place in the financial services sector. Money laundering protection is another area being developed. In other industries blockchain is powering change too, such as tracking goods in the supply chain space to storing personal medical data in the healthcare sector.
But perhaps the biggest success story in blockchain is the insurance industry. The decentralized nature of blockchain makes it ideal for smart contracts, which are essentially computer programs which operate as agreements in which the terms can be preprogrammed with the ability to self-execute and self-enforce. Smart contracts enable anonymous organizations to do business with one another directly, and securely, and can reduce costs by cutting out middlemen.
The right partner is a must
Enterprises that want to leverage blockchain’s benefits need to approach it the right way. There are new business models to be developed and new opportunities to be had thanks to blockchain’s ability to reduce risk. As blockchain goes increasingly mainstream companies will need to change mindset and there needs to be an appropriate level of trust in blockchain. The right consulting partner can enable companies to make the shift to blockchain as smoothly as possible.
It is now not out of the question that there will be a digital future in which everything of value can and will be will be exchanged in digital format. Blockchain will be the platform on which that is based.
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I work as a consultant for the banking & insurance practice within Orange Consulting in Paris for 2 years. I’m more focused around innovation topic : how we could innovate with or for the customer, that is the reason why I frequently work for our innovation funds.
On my free-time, I like to explore new cities and countries and I’m a fan of music, all types of music !