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Community Knowledge

Blockchain – The myths, the reality and realistic applications for driving innovation

Whitespace logo By Whitespace
29th October 2020

The March 2018 meeting of the Whitespace Innovation Community looked at the reality behind the hype around blockchain, the practicalities of such a technology, and what impact it may have on innovation.

A person studying analytics on a laptop

Meeting Theme

The March 2018 meeting of the Corporate Innovation Club looked at the reality behind the hype around blockchain, the practicalities of such a technology, and what impact it may have on innovation.

And the meeting started with a rather unlikely question: ‘who here doesn’t really know what the blockchain is, but is already tired of hearing about it’? Several hands went up across the room, demonstrating the potential for hype and buzzwords to limit the impact of emerging technologies. We have all heard of the blockchain – typically with reference to cryptocurrencies like Bitcoin – but all the excitement around it has perhaps distracted from the reality of such a system, its potential and its relevance to Corporates.

As such, the Corporate Innovation Club gathered to separate hype and reality, and understand why blockchain may matter, rather than just be told it is the proverbial ‘next big thing’. And never one to fail to innovate, this time the Club’s meeting took a loose whiteboard workshop format, with charismatic visiting speakers Joel Semeniuk of Horizon Three and Robert Learney of Digital Catapult leading proceedings.

Key Takeaways

Understanding the blockchain as a system to monitor complex systems.

Simply put, the blockchain enables a particular form of the ledger to be created and maintained. It can also be understood to be a technology that is a platform on which large, complicated and decentralised databases of information can be built. The word ‘decentralised’ is important there. Blockchain’s potential comes in its status as a ‘distributed ledger’.

Blockchain, then, is the technology on which distributed ledgers and apps and systems that use them are built. Whereas a centralised ledger would be owned by the likes of banks and government – who would control access and editing rights to the information therein – a distributed ledger built on the blockchain exists on every computer of everyone that uses that ledger. Any changes made at one computer are near-instantly made everywhere else that ledger exists, thanks to synchronisation over the internet. And complex algorithms make sure that a given blockchain database or application cannot be ‘controlled’ or adjusted unfairly from a singular point. Blockchain databases can, however, be limited by private networks of members, or offered as truly public entities.

Blockchain systems offer trust and democratic access to information.

If the entirety of a system is constantly updated and available to all involved in that system, there is little-to-no capacity for mistrust. In short, no single owner is able to police, control or influence the system. Power to do those things is taken from individuals and spread equally between the masses. At a fundamental level, the blockchain can be understood to offer an intermediary that monitors sales, movement of goods, administration and the delivery of service. However, instead of that intermediary being a powerful individual or single organisation, it is potentially a crowd of millions, all able to adjudicate and check every step of a process. In many cases, the ‘owners’ of a blockchain application are also the ‘users’ of that application.

Working case studies make the potential of the blockchain much more straightforward to comprehend, and harness.

If the blockchain is the foundation for decentralised databases of information that are updated simultaneously and universally with every change made to them, they have many uses.

The blockchain isn’t only about cryptocurrencies

While Bitcoin and its ilk have presented the most high-profile case study of blockchain use – where a blockchain solution monitors the movement and ownership of cryptocurrencies – it would be wrong to believe that blockchain and cryptocurrencies are one and the same thing. Their histories are tied, but not their application. To quote FT technology reporter Sally Davis ‘[Blockchain] is to Bitcoin, what the internet is to email.’ As such, it is wise to think of the blockchain as a foundational technology, and not a single application or technology.

If the internet changed your business, blockchain will have at least as profound an effect.

It was pointed out that even ‘non-technological’ work has been revolutionised by the internet. The example was put forward that a self-employed sole-trader gardener in 2018 will likely have an email address, website, social media presence and perhaps do their accounting through a cloud-based app while advertising on websites. The craft of landscaping a garden and helping plants thrive may be the same as ever, but the context in which that business is conducted has changed a great deal.

The takeaway? Even if the blockchain won’t change the core of your business, it is likely to significantly reshape the framework in which your business operates.

The blockchain is not a tool for corporate innovation; it is a technology that allows you to create those tools. And it is ‘easy’ to come up with ideas.

In a workshop context the Corporate Innovation Club members brainstormed ideas for how to implement blockchain-based concepts, both as innovation technology, and more broadly.

There are challenges to the blockchain revolution.

For Further Consideration

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