Anyone with any sort of experience in the technology industry will be familiar with its obsession with buzzwords. From digital transformation to big data and the Internet of Things, it is almost impossible to escape or ignore the latest buzzword. As 2018 draws to a close, we’ve certainly had our fair share of buzzwords, but one that has intensified more than any other over the last 12 months is blockchain. Although the technology has been around for some time, it well and truly entered the public’s consciousness this year. So much so that almost every technology company is trying to muscle in on the conversation one way or another. However, despite the hype, practical applications of the technology have been few and far between in visibility.
A perception problem
When you look at analyst reports, the blockchain industry appears to be going from strength to strength. According to the IDC, US businesses invested around $640 million in blockchain in 2018, followed by Western Europe at $340 million, and these numbers are set to increase over the coming years.
But, despite the investment, some key issues are holding back the development of actual products and services. One of the main problems is that many people simply don’t understand the difference between enterprise blockchain (the underlying technology) and cryptocurrency (the first notable application of blockchain).
The second issue is that the negative connotations of cryptocurrencies are preventing businesses from seizing the opportunity that enterprise blockchain represents. These concerns have led to uncertainty around wider enterprise blockchain developments, with many businesses not prepared to take what they consider to be a risk on the technology.
What’s more, the number of practical blockchain-enabled applications entering the market are being outnumbered by companies taking advantage of the hype and using it as their product’s selling-point. Many are simply using the term ‘blockchain’ as a marketing lever, without actually implementing the technology in a way that solves real business challenges.
This all adds up to a perception problem that is making it difficult for companies with genuine products to achieve cut-through. So, what can be done to ensure that enterprise blockchain lives up to the hype and that it realises its promise as a truly transformative technology?
Fulfilling its potential
Rather than blockchain taking centre stage, the technology should be left to conduct its considerable work from behind the scenes. When used correctly, enterprise blockchain is a business enabler that solves the problems many modern digital enterprises face. Especially when it comes to trust, efficiency and security.
For example, enterprises today are spending huge amounts of time and money on expensive software solutions but are still failing to protect themselves from breaches and hacks. Many have also turned to zero-trust solutions in an attempt to access and exchange data more securely, but these solutions are using historical data management techniques and inadvertently making collaboration more difficult and inhibiting business agility.
Enabling a secure and seamless flow of data – both internally and externally – that businesses can guarantee (via architecture and auditability) hasn’t been tampered with is one of the thorniest challenges in the today’s digital economy.
So, how can enterprises securely collaborate while maintaining absolute trust in their data? The simple answer is: by using a data management platform based on private permissioned blockchain technology. By providing an immutable system of records secured with a cryptographic key, with contextual access blockchain can allow organisations to retain control of their data no matter who has accessed, read, written or shared it. Through blockchain, enterprises can securely share critical data with authorised third parties outside of their organisation’s normal perimeter of control.
In this context, blockchain isn’t a marketing gimmick. It is simply the best data management solution to a very real business problem.
This is how organisations must be prepared to think. For enterprise blockchain to provide real value to businesses and consumers in the future, it can’t simply be thrown around as a marketing phrase, or as a meaningless buzzword attached to an ideology. Its true utility is as an innovative, technological solution to a range of distinct business problems.
The temptation is to get unrealistically excited by blockchain’s potential to transform every way we work and make it the headline act of the show. However, given the current state of confusion, we need to reset the conversation and make sure prospective users don’t lose sight of its real benefits and potential for existing operations, as well as its role in digital transformation activities. Once these benefits are communicated and understood, we might just then begin to see the difference between the hype surrounding this transformative technology, and its tangible value.
Ian Smith, Founder and CEO of Gospel Technology