Talking about how cryptocurrencies will change the world will invariably see the blockchain mentioned at least in passing. And yet, the technology is about so much more than that.
Vincent Entonu, Comstor Africa director at Westcon-Comstor Sub-Saharan Africa
Fundamentally, the blockchain is a public digital ledger of transactions that records information in a way that makes it difficult to hack or alter. It provides a secure way for individuals to deal directly with one other, without an intermediary like a government, bank, or another third party. But beyond the technology, the blockchain is all about creating an environment of trust.
Such is its potential that nearly every function in a business could be using it. Whether it is managing private and public records, contracts, physical assets, and intangibles, digital tools like Smart Contracts will positively disrupt traditional, paper-based methods. Beyond that, blockchain solutions can track the contractual ownership of property, assure the accuracy of messages in a private chat room, and decentralise the management of everything from IoT devices to currency transactions.
But as with any early-stage technology, business and technology leaders must give careful consideration to the challenges facing the blockchain. These range from the immaturity of standards and IT-team skills, security concerns and interoperability and scalability questions. Of course, none of these are insurmountable obstacles, and they just require some out-of-the-box thinking to address effectively.
Rethinking the supply chain
An organisation like Cisco has highlighted how the blockchain can be used to overcome the complexities of a sprawling, global supply chain. The Cisco ecosystem spans 13 countries and 25 locations from mines in Africa to suppliers in Asia, manufacturers in China and customers and partners worldwide.
Dealing with 700 suppliers, 3 200 orders, and shipping 220 000 items daily is bound to cause a few issues. However, Cisco uses blockchain technology to create a trusted supply chain that can simplify operations and reduce friction.
For instance, the blockchain has helped Cisco reimagine the provenance of goods. The technology can also help suppliers to ensure raw materials are ethically sourced. The blockchain makes it easier and faster to onboard suppliers through digital ids. And from a compliance perspective, customer clearance can be digitally driven through the blockchain.
Using the blockchain, Cisco has created an anchor of trust for a more simple, secure, and scalable supply chain.
Keep aware of security
And while the blockchain is a secure environment to manage these and other use cases, it is not completely failsafe. It is true that it is nearly impossible to change data once it is written to the blockchain. It is also extremely difficult for unauthorised users and applications to access this data and feed new data into the blockchain. But all this depends on the quality of the security architecture.
In other words, businesses must ensure the data and transactions entered into the blockchain ecosystem have the proper security controls in place. If integration points are hacked, the entire blockchain network could be compromised, and therefore, end-to-end security is a must.
Range of functionality
The blockchain is also something that can extend beyond finance and supply chains. For instance, in healthcare, providers can employ blockchain technology to manage electronic medical records securely. So, doctors can request permission to access a patient’s medical history, and they can then record transactions on the ledger, making them available to other healthcare professionals in the network.
Other blockchain applications include simplifying microtransactions (like those used in the music streaming industry), creating Smart Contracts, and strengthening consumer data privacy across social networks.
Global innovation
In Israel, a digital residents club has been using the blockchain since 2013 as a basis to interact with the city government and share more information about themselves. In return, the city has developed a platform that provides discounts on city services, tickets to events, early registration for school, information on public initiatives, and a host of other city services.
Now, just imagine the potential of the blockchain in South Africa’s own smart city projects, the healthcare system combating the COVID-19 pandemic, and even the property market that is starting to show a glimmer of growth following a tough few years.