Companies Embracing Blockchain Open the Door to Innovation
March 21, 2018
Many companies are still taking a wait-and-see approach with blockchain, uncertain about the ledger-based technology’s practical applications for business. But these companies need to understand that while they wait, organizations of all sizes across industries are already applying blockchain in imaginative ways—or plan to do so very soon.
In fact, more than half (56 percent) of midsize companies are deploying or considering deploying blockchain, according to Juniper Research. And recent research by IBM found that one-third of C-suite executives are actively using or exploring the use of blockchain technology in their business. Business model innovation, enhanced collaboration and risk reduction are just some of the benefits these executives say they hope their companies can realize by adopting blockchain.
“We’re seeing the era of ‘blockchain tourism’ fading fast,” says Marie Wieck, general manager, blockchain, at IBM. “It’s becoming increasingly difficult for businesses to ignore blockchain’s potential to drive growth from new business models due to the fundamental change it can introduce in the way that organizations collaborate and transact.”
The breakdown on blockchain
So, why are many businesses still on the fence about blockchain?
For some, it’s a lack of understanding about what blockchain is. Here’s a crash-course definition: A blockchain is a chain of digital “blocks” that contain records of transactions. Each block is connected to all the blocks before and after it. Parties in a blockchain network can view all the records in the blockchain, but they cannot change or delete the existing records, which are secured through cryptography. (Learn more about blockchain security here.)
“The value of blockchain is in the network. When a whole ecosystem can efficiently connect and securely share information, this value scales exponentially as the network grows," says Wieck.
Another hurdle to adoption is the fact that blockchain is a very disruptive technology — the type Wieck says can transform entire industries and only comes around maybe once or twice in a lifetime. Many companies, especially businesses that have been slow to pursue digital transformation, have simply not been ready to explore the use of blockchain technology or undergo the type of change it may bring.
But perhaps the biggest reason organizations have not yet experimented with blockchain is that they have been unable to identify or visualize relevant use cases for their business. Fortunately, IBM has many compelling examples to share from our own work with blockchain technology.
Helping to drive the blockchain train
Our blockchain team of 1,500 has experience with more than 400 engagements around the globe to develop blockchain applications, activate blockchain networks, and get the most value from this disruptive technology. For instance, we are working with:
- The U.S. Food and Drug Administration to study the use of blockchain technology for secure exchange of healthcare data.
- Sony and Sony Global Education to develop a new system, built on the IBM Blockchain platform, to manage students’ learning data.
- we.Trade, a group of nine of Europe’s largest banks, provides a new trade finance platform designed to simplify domestic and cross-border trade for small and medium enterprises in Europe, while helping to increase overall trade transaction transparency.
Also, we recently announced that we are creating a joint venture with shipping giant Maersk that is meant to transform the global shipping industry. We are working to develop a global trade platform that uses blockchain technology and will improve the cost of transportation and reduce the lack of visibility and inefficiencies with paper-based processes.
HfS Research ranks IBM Services as the leading blockchain consulting practice. The IBM Blockchain Platform, based on the Hyperledger open-source fabric, has more than 3.2 million customer-generated blocks and is growing daily. We have also contributed nearly 5 million lines of code to Hyperledger.
IBM is also sharing our work with blockchain with more than 1,000 universities. We want to help build a highly skilled, blockchain-savvy technical workforce to support the many businesses that are poised to move away from kicking the tires on blockchain to innovating with this technology at full speed.