Interest in blockchain is big, with 66% of all companies recently indicating they have at least one eye on the emergent technology. This should come as no surprise considering how much buzz has surrounded blockchain over the past few years. And with all this interest comes a lot of questions.
In particular, questions that CEOs have when it comes to understanding blockchain technology and grasping its benefits.
As the head of a company that wants to make blockchain applications accessible for everyone, I’ve heard all of them.
Sometimes twice in the same meeting.
So, here are my honest and (at this point) extremely well-drilled answers to the 5 questions that CEOs ask the most about blockchain.
What Is a Blockchain?
Let’s face it. You don’t necessarily care about the answer to this one.
Your CTO or CIO already knows what it is and how it works. That’s why you trust them to lead on the technical side of things.
What you really want to know as a Chief Executive is ‘what can a blockchain do for us?’
Now, the answer to that largely depends on what industry you’re in. But in short, blockchains allow for the immutable record of data and the automatic execution of digital agreements known as smart contracts.
Blockchain is yet to experience its full boom, but its potential is undeniable and, I believe, unstoppable.
It really is a fundamentally transformative technology that will change how we conduct any exchange of value with each other.
How Does a Blockchain Work?
One answer is quite technical and involves words like “nodes”, “miners” and “hashing”.
A more interesting answer is, “However you want it to”.
OK, that might be a bit hyperbolic. But in all seriousness, the use cases are so wide-ranging and disruptive in nature that you can let your imagination run wild a bit.
Just take supply chain management; transacting parties currently have to deal with breaks in data transparency, or dark spots.
Manufacturers might keep production data of the certain product, but that’s not necessarily available to the warehouse once the product is in storage. Similarly, a shipping label might be generated when the product is ordered online, but the parcel tracking information doesn’t tell anyone what’s actually in the box.
These dark spots present opportunities for mistakes, or in some cases even fraud and theft.
Blockchain solutions have the potential to shine some much-needed light into these dark spots by offering a digital space where all of the accumulated data can be held, raising accountability to unprecedented levels and giving organizations a complete view of the product’s lifecycle.
Not only that, but this is all done in a less time-consuming, less limited and much cheaper way than EDI and XML programming.
This is particularly ground-breaking in areas like the food and automotive industries, where the integrity of what’s being supplied is vital to meeting standards or complying with regulation.
What are the Main Benefits of Blockchain Technology?
Now we’re getting somewhere!
The benefits of blockchain are really only limited by two things: your imagination and your ability to convince potential collaboration partners to join you.
Once you get key parties on board, you can really get creative with some amazing applications.
That said, the main benefits of blockchain for many businesses can be summarized into the following areas:
Almost anyone who adopts the technology is going to benefit from increased transparency and data coordination, as illustrated in the supply chain example above.
- Cost savings
On top of that, blockchain can deliver cost savings by streamlining processes and removing the need to pay third parties to oversee or approve agreements and transactions.
The immutable nature of a blockchain also means that the risk of fraud can be dramatically reduced and it’s much easier to spot when it does occur.
What is a Blockchain Application?
Blockchain applications are essentially programs that run on a blockchain system. In practical terms, you can think of them just as you do with digital software applications.
An effective example of a blockchain application would be to help form a consensus between individuals or organizations.
They do not know each other very well. And they need some way to ensure that trust is established regarding the outcome of a certain process – like the transfer of an asset.
Usually, some kind of third party would become involved to establish this trust. (Think of a notary or an agent.)
But blockchain applications can automate this function instead.
As well as fostering trust in this way, they can be used to add an extra degree of security, for the tokenization of assets and to create new network incentive structures (such as performance-based reward systems).
What Blockchain Solutions Are Available?
Many projects are underway, as some of the world’s biggest names are already experimenting with blockchains.
IBM, Microsoft, Google, Walmart, Maersk and AIG are just a few of the high-profile cases where we are seeing serious investments.
More and more are expected to follow suit.
Many of the solutions that we have seen so far focus on the immutability of a blockchain so that data or records can be tracked in a more sophisticated way.
Others are more adventurous and look to build more complex smart contracts.
Aurachain, on the other hand, has a slightly different approach. One that we’ve found is particularly appealing to Chief Executives.
That’s because when you take blockchain technology and make it optional, as well as accessible through low-code development, what you get is a particularly innovative platform that allows you to build your own applications that can be hosted on or off a blockchain.
So, even if you don’t feel ready to jump into the deep end of creating your own smart contracts, you can still see immediate operational benefits by building digital business process applications.
You get results today plus access to experts that can help you experiment with ideas and align yourself appropriately for the challenges of tomorrow.
And when the time comes, your adoption or move to blockchain-based applications will not seem like a mountain to climb. Rather, it will be more like the final step of a transition you are fully prepared for.