You have probably heard of blockchain. The underlying technology that powers bitcoin and other cryptocurrencies. And if you are conversant with the bitcoin and blockchain scene, chances are you have heard claims of how this new technology will revolutionise lives, industries, create new economies, disrupt old systems, redefine organisations and governments.
Can blockchain make this possible? Probably yes, but how will it happen, and how do we unlock its full potential? This is what we will discuss in this article.
Let me start by defining blockchain.
Blockchain is a distributed ledger technology (DLT) that can record transactions, contracts, store data, assets between individuals, businesses or organisations in a secure and verifiable way that can hardly be altered.
The advantages of this innovative technology are many. The obvious one is decentralisation – a system using blockchain does not operate on a central server or controlled by a single authority. This eliminates the need for a third-party or middle man.
Other advantages include security, and transparency of information recorded. Blockchain-powered systems, for instance, do not store records in a central location, but across millions of computers on the network. therefore, its almost impossible to hack.
Blockchain can be very versatile. There’s no doubt about its potential, and how it can be utilised to transform what forms the basis, and core aspects of businesses, organisation, and many governments.
Having said that, it’s important we fully understand the concept of this innovative technology, before we can think of how to unlock the inherent potential in it.
Understanding the concept of blockchain as an innovative technology
Blockchain is not disruptive, but a foundational technology. – Harvard Business Review
Blockchain is not as disruptive as acclaimed? Disruptive innovations displace existing systems by providing a cost-effective solution and renders incumbent companies obsolete.
But we’re not witnessing any of this, rather we are seeing companies, larger corporations, embrace this technology.
For instance, the invention of the internet and web technology completely changed the way we do business, brought a new model that never existed before, and companies who were unwilling to use it then become extinct.
Another point; a disruptive innovation often leads to the creation of a new market, which provides low-cost solutions over existing ones. The invention of email, for example, displaced letter writing and postal industry changing the way we communicate.
Will blockchain creates a new market or improves existing ones?
Blockchain is a foundational innovation. A continuation of the history of internet technology. At its core, the blockchain is a new layer on the internet.
Just like the web, blockchain cannot exist without the internet. This new layer talks about trust. The ability to transact between two parties with no middleman.
We can liken blockchain to an operating system (OS) where new applications can be built upon. Google, Facebook, amongst others are examples of web applications.
Already, we witnessing a hybrid of blockchain and web applications. Microblogging platform Steemit and some cryptocurrency wallets are popular examples.
But, the real blockchain-based applications will totally differ from all the existing ones we are witnessing, as they will be decentralised, trust-based and peer-to-peer focused.
Unlocking the real potential of blockchain
While blockchain promises to disrupt the tools and system put in place to manage and keep our society in check, however, we are still in the early phase and there’s much needed to be done if we are to realise the full potential.
The blockchain led transformation we are hoping for won’t happen fast as many suggest. Rather, it will be a gradual process.
The technology is nascent and still finding its feet. Research and development are ongoing and there’s a growing list of new ways to apply this technology.
To unlock the full potential of blockchain, being a foundational technology, there’s a need for a conscious approach. Governments, organisations, companies, and businesses must first put the needed structures in place.
In Africa, for example, many cities still struggle for basic needs like electricity and internet infrastructure, which are needed for blockchain to thrive.
There’s also a need for active blockchain education, so people can understand how the technology works. Businesses must educate their customers on how to use their blockchain-based products, organisations must train their employees of this technology, likewise, governments must do the same.
There are many blockchain innovations we would yet witness in coming years. Maybe the future Google, Facebook, and Amazon. But to maximise this technology, we must first educate and transform society to take advantage of its capabilities to make systems more efficient.