In the last month, the hype around Blockchain and Bitcoin has been increasing more and more. In spite of this, the present use of the technology is limited to some applications and pilots. The forecasted revolution associated with the Blockchain has yet to come; the technology has still to deliver the (too many?) claims made around it.
Whatever may be the outcome of the technology in the future, the possible applications are virtually unlimited. The Blockchain has the potential to represent a revolution comparable to the introduction of the Internet. Out of the huge quantity of information available on Blockchain and potential applications, I retained a few lessons I learnt as a Blockchain passionate.
The first one is that a Blockchain is a register. As simple as that. Also, a lot more but knowing this is already a good starting point.
Do not confuse Blockchain and Bitcoin
The rollercoaster of the price of Bitcoin and other cryptocurrencies during the last months is invigorating even more the buzz around the Blockchain. Nevertheless, cryptocurrencies and Blockchain should not be confused. Cryptocurrencies are just one of the zillions uses you can make of the Blockchain.
Having a negative opinion of the Blockchain because of the market bubble (?) associated with the market value of such cryptocurrencies is a huge misunderstanding. It is like saying that Internet is bad because your email is full of spam. As for every new revolutionizing technology, the possible applications are limited only by imagination. The negative or positive impact of such technology is ultimately determined by the use people make of it.
History repeats itself?
Think about the Internet before it became a commonly used technology. How many industries have been disrupted by the introduction of it? The possible implications of the Blockchain are similar. Significant solutions but not the universal remedy. Many companies probably regretted not having understood in time what would eventually be the implications of the Internet. How many companies will regret in 10 years not having understood and invested earlier in Blockchain? Many question marks but few certainties.
Whatever the answer may be, the advice is to start building your knowledge to understand the potential impacts for your industry. How can you take advantage of the possibility to instantaneously perform any kind of transaction on a decentralized, secure, immutable register? How can you integrate that into the business model of companies?
The one question to be considered
The parallel with the Internet helps to understand the potential uses of a Blockchain. Considering the possibility offered by the two technologies to connect everyone and everything in the world. The main question to answer in the 90’s during the Internet revolution probably was: “how can you take advantage of the possibility to instantaneously exchange every kind of information on a common platform?”.
Concerning the Blockchain, the question to ask has many similarities: “how can you take advantage of the possibility to instantaneously perform any kind of transaction on a decentralized, secure, immutable register?”. The difference looks subtle but is not. That is why, in many cases, it is not straightforward to define whether a Blockchain would be disruptive or a better use of the Internet infrastructure would be sufficient.
Blockchain is for Transactions what Internet is for Information
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Michele Soavi is an independent consultant supporting companies in creating value and innovating from a financial, social and environmental perspective by leveraging on the analysis of their business model, financial information and data.