Menu
4 ways blockchain is the new business collaboration tool

4 ways blockchain is the new business collaboration tool

Smart contracts, healthcare data-sharing and microgrids are all taking advantage of the technology.

While blockchain may have cut its teeth on the cryptocurrency Bitcoin, the distributed electronic ledger technology is quickly making inroads across a variety of industries.

That's mainly because of its innate security and its potential for improving systems  operations all while reducing costs and creating new revenue streams.

David Schatsky, a managing director at consultancy Deloitte LLP, believes blockchain's diversity speaks to its versatility in addressing business needs, but "the impact that blockchain will have on businesses in various industries is not yet fully understood."

This year, blockchain technology is expected to become a key business focus for many industries, according to a Deloitte survey conducted late last year.

The online survey of 308 blockchain-knowledgeable senior executives at organizations with US$500 million or more in annual revenue found many placed it among their company's highest priorities.

Thirty-six percent believe blockchain has the potential to improve systems operations, either by reducing costs or increasing speed, and 37 per cent cited blockchain's superior security features as the main advantage. The remaining 24 per cent say it has the potential to enable new business models and revenue streams.

Although 39 per cent of senior executives at large U.S. companies had little or no knowledge about blockchain technology, the rest said their knowledge ranged from "broad to expert -- and 55 per cent of that group said their company would be at a competitive disadvantage if it fails to adopt the technology.

The bottom line: both the understanding of and commitment to blockchain varies by industry. But most see it as disruptive.

"It is fair to say that industry is still confused to a degree about the potential for blockchain," Schatsky said in a statement

"More than a quarter of surveyed knowledgeable execs say their companies view blockchain as a critical, top-five priority. But about a third consider the technology overhyped."

Those already embracing blockchain are finding a new independence in their ability to transmit both sensitive data and money securely, enabling a new business dynamic.

Blockchain is a decentralized electronic, encrypted ledger or database platform -- in other words, a way to immutably store digital data so that it can be securely shared across networks and users.

As a peer-to-peer network, combined with a distributed time-stamping server, blockchain databases can be managed autonomously. There's no need for an administrator; the users are the administrator.

Blockchain eliminates huge amounts of recordkeeping, which can get confusing when there are multiple parties involved in a transaction, according to Saurabh Gupta, vice president of strategy at IT services company Genpact.

"Blockchain and distributed ledgers may eventually be the method for integrating the entire commercial world's record keeping," he said.

Smart contracts

Blockchain distributed ledgers can be used to automatically execute business contracts. The peer-to-peer database first captures all terms and conditions between an organisation and its customers, then uses data gleaned across distributed nodes or servers to determine when those conditions have been met and payment is authorized.

For example, an insurance company could pen a policy for farmers that states they will be paid if a drought affects agricultural production; the condition of the contract may statetcat if a drought persists for 30 days, payment is made.

There is no need for human intervention in determining whether those drought conditions have been met and payments can proceed automatically, streamlining the process. The result: saved time and money.

In a similar way, blockchain-based smart contracts can be used to automatically execute payments between financial institutions.

Accenture recently released a report that claimed blockchain technology could reduce infrastructure costs for eight of the world's 10 largest investment banks by an average of 30 per cent, "translating to $8 billion to $12 billion in annual cost savings for those banks."

Payments, clearance and settlement in the financial services industry -- including stock markets -- is rife with inefficiencies because each organization in the process maintains its own data and must communicate with the others through electronic messaging about where it is in the process.

Because of that, settlement typically takes two days. In turn, delays in settlements force banks to set aside money that could otherwise be invested.

With its ability to instantly share data with each organization involved in a blockchain database or ledger, the technology reduces or eliminates the need for reconciliation, confirmation and trade break analysis as key parts of a more efficient and effective clearance and settlement process, according to Accenture.

Enabling businesses to avoid transaction fees

Most payment systems are administered by financial institutions, such as banks. When money is transferred between businesses, there's typically a fee associated with it -- especially for small to mid-sized businesses.


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags BlockchainBitcoin

Featured

Slideshows

Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Veritas honours top performing trans-Tasman partners

Veritas honours top performing trans-Tasman partners

Veritas honoured its top performing partners across the channel in Australia and New Zealand, recognising innovation and excellence on both sides of the Tasman. Revealed under the Vivid lights in Sydney, Intalock claimed the coveted Partner of the Year 2017 (Pacific) award, with Data#3 acknowledged for 12 months of strong growth across the market. Meanwhile, Datacom took home the New Zealand honours, with Global Storage and Insentra winning service provider and consulting awards respectively. Dicker Data was recognised as the standout distributor of the year, while Hitachi Data Systems claimed the alliance partner award. Photos by Bob Seary.

Veritas honours top performing trans-Tasman partners
Show Comments