FountainBlue’s May 3 VIP roundtable was on the topic of ‘Blockchain Use Cases’. Please join me in thanking our gracious hosts at Carta and our participating executives in attendance. Below are notes from the conversation.
A blockchain is a growing list (or ledger) of records consider them ‘blocks’, which are linked together securely using cryptography, and include a timestamp, and transaction data. There’s been a LOT of BUZZ about how blockchain solutions will change the world, and HYPE around bitcoins in particular, hype which has not materialized into huge, sustainable fortunes for most people.
This month’s participating executives shared their thoughts on current and future use cases of the blockchain, and talked about the blockchain challenges and opportunities ahead. Below is a summary of their comments.
Why do you need to use blockchain?
- Blockchain solutions are most useful when you’re working with two entities who don’t trust each other, but need to engage with each other on a transaction, and also need to trust that the transaction will be executed as agreed by both parties.
- Blockchain solutions are useful when the buyer or the seller knows more than the other party, AND both parties want to ensure that data and information is fully shared about the negotiated commodity. An example of this is selling used cars.
Elements of a successful blockchain solution:
- Core to any successful blockchain solution is the flexible and efficiency management, ledgering and tracking of assets and their ownership. Defining the smallest units of ‘assets’, the smallest incremental units of these ‘assets’, the number of available ‘units’, the interim and ultimate value of these assets, the definition and conditions for changing ownership, the process for recording ownership shifts, etc., are all of essential importance.
- Blockchain solutions must include sophisticated cryptographic technology and integration processes so that they are ‘un-hackable’. Both parties must trust that neither can cheat, and that no outside party can interfere.
- Blockchain solutions must shore up the weakest elements of a solution as hackers are most likely to focus on breaking in there.
- Even if a blockchain solution is un-hackable and completely secure, others might be able to triangulate available data and extrapolate implications of that data.
- Blockchain solutions must respect the privacy of users.
Thoughts on how to get blockchain solutions adopted:
- Policy standards must be flexible enough to accept quality blockchain solutions, yet firm enough to discourage corruption and malfeasance.
- Technology platforms must be integrated/standardized enough to support vetted blockchain solutions.
- Banks, corporations, government, church, and other entities must be open enough to consider blockchain use cases. When there are clear and beneficial use cases across sectors, mass adoption will follow.
The Challenges and Opportunities for blockchain use cases:
- Connect blockchain assets into physical assets (like energy, physical coins, etc.,) to get more stable value columns.
- Hire people who are technically astute, but also flexible, collaborative, open-minded, creative and willing to learn. They are the ones who will design the blockchain use cases of the future.
- Change needs to happen at all levels within an organization for fully embrace the benefits of blockchain.
- Sometimes it makes sense to build a consortium of parties to ensure the quality of goods exchanged. An example of this is to have tech companies collaborate to ensure that the supply chain for manufacturing is of the highest quality.
The bottom line is that blockchain use cases will be created, and will be adopted and useful, but only: 1) when we need to Trust in the integrity of the data/information; 2) when we want to respect the privacy of the parties; 3) when we want to ensure security of the transaction; 4) when two parties need to exchange assets fairly; and 5) when we need real-time, validated information about the assets we possess.
Resources and Links:
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