The Blockchain is full of potential technology that can disrupt or improve present institutions, but how do we capture the most value in the process?
If we were to write this article a year or two ago, we would devote it to explaining what Blockchain is, now, however, Blockchain is a widely known phenomenon: universities offer classes on the topic and YouTube is overflown with explainers for kids on what Blockchain is.
Blockchain’s core advantages are decentralization, cryptographic security, transparency, and immutability.It allows information to be verified and value to be exchanged without having to rely on a third-party authority.
Blockchain is being used in different spheres: finance, as we have seen it be the case with decentralized crypto exchanges; politics, as we have read about using Blockchain to cast a digital vote; law, as people start to utilize smart contracts; and even medicine, as new healthtech companies want to use Blockchain to store data about your DNA. The rapid advancement is not surprising considering that the World Economic Forum survey suggested that 10 percent of global GDP will be stored on blockchain by 2027.
However, now that everyone knows what blockchain is, you cannot simply make money by building anything on blockchain, novelty won’t yield your ROI, but knowing different strategies on how to capture the most value with Blockchain will.
When it comes to long- and short-term value, Blockchain will reduce costs in a short-term, and in the long run, it can become a framework for a credible and bullet-proof service or a product you might provide.
As for now, there are 5 main uses for Blockchain:
1.Storing data and identity: land registry, patent, copyright, ID, voting.
2.Smart contracts: self-executed contracts with a predetermined outcome.
3.Dynamic registry: data registry that updates itself.
4.Payments ecosystem: peer-to-peer transactions, cryptocurrency.
5. Initial Coin Offering.
According to the McKinsey research report, most commercial blockchain platforms will use private, permission architecture to optimize network opened and scalability, such architecture allows stakeholders of a different magnitude to extract, create and distribute commercial value. The participants can also choose whether, how, and if, the data is shared.
To assess the value Blockchain may yield to your service or product you need to critically look at whether your project can benefit from such technology: whether it can enter or fit into the established ecosystem, if it can facilitate such technology without reducing the products’ main features, and if it can operate within the regulatory framework. Sometimes it can be tempting to implement Blockchain for “the fun” of it, but such practices usually don’t bring profit or positive feedback from the affected community.
Blockchain has great potential, hype notwithstanding. Blockchain reduces the costs associated with intermediaries, it allows us to control and most importantly to protect our data from being breached and exploited, which is very relevant in the times we live.
Originally published on Medium.