Blockchain has huge possibilities to modernize and enable, Energy, Mining, Agriculture and Healthcare & Human Services industries.
Blockchain enables true decentralized marketplaces and business models. But it requires a deep understanding, not only of the technology, but also the differences to current business model mechanics, like governance and network effect. The promises, hype, heresy and perils of blockchain technology can be very daunting.
Blockchain technology continues to evolve and develop for use across multiple industries. This is an intriguing game-changing development in the digital development transformation roadmap. The main question that people currently have is not technology driven, they are business driven:
1. What are real use cases of Blockchain beside crypto currencies?
2. What are blockchain enabled business models?
3. Will Blockchain technology disrupt or boost the platform economy?
When we talk about the business model canvas, where you as the owner of the business canvas orchestrates the different stakeholders to exchange value. It’s referred to as a business model. When we talk about Blockchain, we talk about a technology - not a new business model. But it enables new digital business models.
In simple terms, Blockchain is a Peer-to-Peer infrastructure based on 1) distributed databases and 2) smart contracts as the business logic. The databases store encrypted and chained transactions. However, the most important aspect of Blockchain is, that this distributed model eliminates the need for a central / intermediate middle man.
Blockchain was the first fully functional Distributed Ledger Technology (DLT) and the term Distributed Ledger Technology is an umbrella term used to describe technologies which store, distribute and facilitate the exchange of value between users, either privately or publicly.
Blockchain “trust protocol” are distributed digital ledgers which are not managed by a central authority, but collectively by a group of users. Blockchain cannot fix everything, however it can solve trust issues and market inefficiencies. It remains to be seen if it can support improved standardization, tracking of goods (across multiple industries) etc. Most energy, mining and agriculture organizations are publicly traded and most trades (today) are not recorded in a shared ledger. However, you may want to mitigate consumer fraud, prevent financing criminal enterprises, and you certainly want to deter severe attacks by terrorists, That’s the challenge of each new technology. Are you ready for this?
DLT has huge possibilities across multiple industries if implemented correctly and regulators do not ruin it with poor bureaucratic, social, economic and trade policies. Blockchain has the potential to support growth and cause disruption because, among other things, it ultimately makes any middlemen or other intermediaries (banks, financial institutions, utilities, exchanges, distributors, publishers and record companies, among other things) superfluous. Despite the disruption of the existing ownership models, there are additional commonalities between the new digital business model canvases and Blockchain. Because both are fundamentally based on a Peer-to-Peer network that disrupts ownership models, both allow a demand side of scale and are driven by network effects.
Blockchain transactions are performed Peer-to-Peer, as integrity and security are guaranteed by the blockchain. There are many indications that blockchains will gain a foothold in regulated industries such as Agriculture, Mining, Healthcare and Human Services and Energy sectors as an efficient, effective and decentralised ecosystem. Decentralized ecosystems will require the appropriate integrated and decentralised blockchain technologies across the supply chain. Blockchains could represent and execute various (automated) business processes and would be an ideal instrument for Internet of Things ( IoT) devices to manage their transactions. Blockchains are also useful as a trust-building element to provide transaction logs to automate proof of origin, smart contracts, automated invoices etc.
The whole blockchain opportunity has potential, because it is applicable across national borders, industries and income groups. The permutations and possibilities are limitless, not only for regulated industries such as energy, mining and agriculture, it could also be the launching platform to modernize Healthcare and Human Services. Even when Blockchain will eliminate the ‘middle man’, it requires an infrastructure with governance and ownership managed in a new way. As an example, here are three types of new intermediary infrastructures that need to be considered:
1. Elimination of intermediaries – an approach where you completely eliminate the middle man (could also be a platform) and go from a centralised paradigm to 100% Peer-to-Peer communication. This requires not only a secure & trusted communication, but also a completely self organized network like a decentralized autonomous organization.
2. Cross-Organizational Process Automation - when you have implemented and established an operational Peer-to-Peer network, you can continue delivery on maximizing automation. It’s not just about communication but also about integration. This requires a network which enables trust and traceability.
3. Innovation – elimination of intermediaries and process automation are evolutionary steps based on existing platforms and networks. However, innovation is different because it establishes a trusted network between stakeholders which has not had any (digital) contact so far. This new connection of trust then promotes and enables new forms of business models and ideation.
Blockchain technology alleviates the reliance on a centralized authority to certify information integrity and data ownership in the current economy, as well as, mediate the transactions and exchange of digital assets, while enabling secure and semi-anonymous transactions along with agreements directly between interacting parties. Within the current economy, the power belongs to the owner of the platform. That person is responsible over the infrastructure, governance and business model. They orchestrate the value exchange and drive the development of the platform to lower the friction of using the platform. Now, let’s combine the new digital business model with a regulated blockchain concept: Then you will see a shift of power from a single owner to a multi-ownership model. Consumers and producers become owners and when the blockchain model includes a proof-of-work & token mechanism, the new owner is not only defining the governance, but also becoming an investor of the new digital platform. In addition, partners and vendors aligned to the new platform business model will have a shift from a “feature” towards a true business enabler, providing additional value adding services towards governance and trust related services.
Blockchain possesses key properties, such as immutability, decentralization, and transparency, which potentially address pressing issues in healthcare, such as incomplete records at point of care and difficult access to patients’ own health information. An efficient and effective healthcare system requires interoperability, which allows software apps and technology platforms to communicate securely and seamlessly, exchange data, and use the exchanged data across health organizations and app vendors. Unfortunately, HHS today suffers from siloed and fragmented data, delayed communications, and disparate workflow tools caused by the lack of interoperability across domains.
Blockchain offers the opportunity to enable horizontal and vertical access, complete transparency, and tamper-aware medical records that are stored in fragmented non-distributed systems in a secure fashion. Blockchain can transform a platform having one owner into a multi-owner platform and build an umbrella network to connect different platforms & organizations with each other. Blockchain is about moving from a centralized domain and data protection to a federated model where data owners are active participants such as patients. As Internet of Things (IoT) devices and other remote patient monitoring systems increase in popularity, security concerns about the transfer and logging of data transactions arise. In order to handle the Protected Health Information (PHI) generated by these devices, blockchain can be deployed to enable smart contracts and facilitate secure analysis and management of medical sensors. Additionally, blockchain can take Electronic Health Records (EHR) out of the expensive vendor driven waste land and enable clients to be active participants across all functions regardless of location. The potential of blockchain could easily be ruined by negative identity politics and economic and social policy.
A word of caution, industry and decision makers should not get ahead of themselves too quickly, SEPARATE HYPE FROM REALITY, take the time to understand why you are adopting blockchain and what results you expect. Poor decisions could magnify the financial and social inequalities within industries and between people in developed and emerging markets.
Failure could be a critical component of blockchain – cyber security will also be a challenge in any digital context. With blockchain and the underlying ecosystems are rapidly and continuously changing over other domains. The more the benefits materialize, the more you have to be careful about it. Early adopters are already getting “carried away with the immediate financial rewards” and are missing the big picture that emerging versions of Blockchain could impact them socially and economically.
Contact us: ResultantGroup Your business modernization, transition and blockchain advisors.
dgajadhar@resultantgroup.com
@dgajadar
Hyper ledger technologies do not depend on national borders and could prove to be the platform to level the playing field, while enabling transparency and traceability across industries and across borders.