Blockchain - what's all the fuss about?

One thing is for certain: technology is always on the move and blockchain is primed to come of age over the next few years, so what’s all the noise about?

You may have heard of blockchain in relation to transacting bitcoins or other digital currencies, but this is just the seed of a technology that has the power to change the way many businesses could transact with their clients.

At its heart, blockchain is a time-stamped series of unchangeable (immutable) data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic methods (i.e. chain). The blockchain network has no central authority and is effectively the very definition of a democratised system. Since it is a shared ledger that cannot be changed, the information in it is open for anyone authorised to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.

Blockchain’s versatility can record financial transactions, store medical records, or even track the flow of goods, information, and payments through a supply chain. Ultimately, blockchain is more of a business model enabler than a technology.

So which types of business would benefit from blockchain? According to PwC, if a company can answer yes to four of the following six questions, blockchain could be an effective solution:

1. Multiple parties share data
   - multiple participants need views of common information
2. Multiple parties update data
   - multiple participants take actions that need to be recorded and change the data
3. Requirement for verification
   - participants need to trust that the actions that are recorded are valid
4. Intermediaries add complexity
   - removal of intermediaries can reduce cost and complexity
5. Interactions are time sensitive
   - reducing delay has business benefit
6. Transactions interact
   - transactions created by different participants depend on each other

Helping to validate the level of business interest, the Deloitte 2018 Global Blockchain Survey showed that 74% of survey respondents reported that their organisations saw a “compelling business case” for the use of blockchain technology, with 34% saying their company had already initiated deployment in some way.

There have been some significant pilot projects in the UK, including the following, which help to show the breadth of scope for blockchain platforms:

1. The Co-operative Food Group began building an alpha-stage blockchain platform with Provenance in the middle of 2017 – with a view to tracking and tracing the sustainability of fish products, from the catch to the plate. Although the platform was originally built to track fresh food, the partnership has gone on to include other kinds of produce, feeding all the data collected at the farms and factories into a database to create a "real-time digital history" that can be accessed by store workers, Co-operative employees, and shoppers.
2. In April, RBS and Barclays announced that they, along with 40 other companies, had completed a blockchain technology trial using R3’s distributed ledger technology. The scheme aimed to reduce the time it typically takes to complete a property transaction. Most of the property market still operates on a system where multiple third parties all exchange information that exists in a paper or email-based format, meaning that purchasing a house typically takes around three months or more from offer to completion. The proposed outcome of the project was to streamline the process and use blockchain technology to remove duplication, costly reconciliation processes and eliminate the need for unnecessary middlemen.
3. Back in 2018, global logistics company DHL partnered with IT services company Accenture to launch a blockchain-based serialisation prototype to track pharmaceuticals across the supply chain in six regions.  Global supply chains are notoriously complex, with diverse stakeholders, varying interests, and many third-party intermediaries all becoming involved at some point throughout the process. While this is less of an issue with some products, when it comes to something as vital as pharmaceuticals, the risks of getting it wrong are far too high.
   
   Each year, 1 million lives are reportedly lost as a result of counterfeit or black-market medications and Interpol has estimated that as much as 30 percent of pharmaceutical products in emerging markets could be fraudulent. The two companies launched a proof of concept which contained nodes in six geographies. These nodes can track the medicine and record its journey on the blockchain – also known as a shared ledger – with various stakeholders including manufacturers, warehouses, distributors, pharmacies, hospitals and doctors.

So, is blockchain good, bad or indifferent? Frankly It doesn’t really matter as blockchain is clearly a technology platform set to expand its global footprint in time.

At Rocktime, we understand that, given the technology is still early in its development cycle, we need to be able to respond when the time comes in order to help clients to transition towards seamless, integrated transactional workflows in an ever-tightening commercial landscape.

Food for thought anyway...