Understanding the Potential of Blockchain Technology
Blockchain is creating a lot of buzz in the industry. There’s a lot of talk about blockchain and how it’s used with cryptocurrencies, such as Bitcoin, but blockchain has the potential to do so much more. Blockchain is an effective tool that can be used in virtually any application or industry.
Blockchain is a single database shared among many participants where each change to the database is monitored and approved by each participant. The database is secured by cryptographic techniques and entries are recorded chronologically. “Blockchain solves for the limitations inherent in existing database architecture while improving security and accuracy,” said Jason Hagan, director of treasury service product strategy at First National Bank. “These are fairly straightforward concepts, but blockchain brings them together in a way that can be applied to a vast number of business processes.”
Blockchain is an effective tool that can be used in virtually any application or industry. For example, blockchain has the potential to make big changes in agriculture. The transparency blockchain brings to the supply chain makes it easy to verify if a product is made sustainably, organically or by a specific producer. This transparency would also make it easier to identify contaminated food in the event of an outbreak. Today, when a recall occurs, it can take days or weeks to determine the source of contamination. Blockchain improves traceability, which in turn improves food safety.
Currently, companies are in a “test and learn” phase with blockchain and there will likely be more point solutions for specific business processes that come to market in the next few years. “Even though blockchain technology is evolving, it isn’t revolutionary in and of itself. What will be revolutionary are the apps people are building on top of the blockchain foundation,” said Hagan. “If you’re a small- or mid-sized business wondering how to leverage blockchain technology, I suggest focusing on processes that are labor intensive or where data accuracy is paramount.”