Blockchain & Business: Improving Your Companies’ Future

By Pablo N. Garcia Rodriguez

As a second post on this blog series regarding Blockchain, Stein IP introduces “Blockchain & Business: Improving Your Companies’ Future.”

Considering the power of Blockchain, it is not surprising that it can also be applied to business. In fact, companies such as Walmart and FedEx implement Blockchain technology as a way to manage their supply chains since it makes possible tracking a product from its origin[1] and controlling assets’ conditions instantly. There are a lot of applications for this technology in the business field, such as smart contracts and transactions recording which can be achieved thanks to Blockchain being a distributed ledger. But what is a distributed ledger and why is everyone talking about it?

A distributed ledger is a decentralized, synchronized and shared database where information is recorded.

  • Decentralized: Data doesn’t rely on a central point of control, it is stored within a network of nodes. Due to lack of a single authority[2], is a more secure place to record transactions and valuable information to the company.
  • Shared: Every member on the network has access to the recorded information, unless there is a permission prohibiting it. This helps the organization save time and money as everything is uploaded just once.  
  • Synchronized:The information is shared simultaneously among all the network’s participants.

Permissions

Because Blockchain is a shared ledger, organization members might be concerned about people from their network having the possibility of modifying information that is important for the company, causing security problems such as data leaks. This leads us to another concept: permissions. If the business network’s operator chooses to set permissions, he or she will have the ability to restrain members’ participation and access to information. This means that participants get a selective visibility into the ledger which protects the organizations’ relevant data from malicious attacks.

Smart Contracts

Contracts are commonly used in business transactions, and Blockchain is no stranger to this area. Although traditional contracts and smart contracts have the same objective, which is to get parties to reach an agreement, there are many differences that make smart contracts more suitable for the business world in the future. Below, a graph shows how smart contracts work.

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Graph from “What Are Smart Contracts? A Beginner’S Guide To Smart Contracts”. Blockgeeks, 2018, https://blockgeeks.com/guides/smart-contracts/

Consensus is an important part of smart contracts’ functionality because conditions are settled and accepted by the parties. The next step is that requirements are met to validate the contract which executes automatically with no third party intervention.

According to a PwC’s[3] 2018 survey of 600 executives, 84% say their organizations have at least some involvement with Blockchain technology. Also, there are some existing predictions that express that by 2030 10% to 20% of global economic infrastructure will be running on blockchain-based systems. This means that companies are getting into this technology because of its benefits since costs are reduced, there is more transparency and a better control in what transactions concern, and besides is easier to trace the origin and conditions of assets and information. Blockchain is certainly improving business and that is why everyone is talking about it.

 


References:

[1] “5 Companies Using Blockchain To Drive Their Supply Chain”. Youtube, 2018, https://www.youtube.com/watch?v=5BGia46oBGA.

[2] “What Is Decentralization? » Basics Explained | Lisk Academy”. Lisk, 2018, https://lisk.io/academy/blockchain-basics/benefits-of-blockchain/what-is-decentralization.

[3] PricewaterhouseCoopers is the biggest Professional Services’ company in the world headquartered in London, United Kingdom.

Sources:

 

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