Part 2 of 5: The blockchain fundamentals by rewired.one
Find out if blockchain is best for you
TL;DR.
Organisations of all sizes have kept records or “ledgers” for hundreds of years. Record-keeping is a time-consuming process, prone to errors and susceptible to fraud.
When considering the question “do I need blockchain?” ask yourself, “is it important to run my business or operation more efficiently and securely?”
It is ideally suited to large enterprises, startups and government agencies that deal with a high volume of users/customers, transactions and data.
Blockchain technology is bringing unrivaled levels of integrity, confidence and efficiency to an ever-widening gamut of organisations, with use-cases for most industries.
How to assess whether you need blockchain technology.
Blockchain is already changing the world and the question you should be considering is not if but when you need to embrace the technology.
Do you need blockchain now, and are you ready now?
Organisations with a need for at least three of the following are strong candidates for blockchain technology:
Data redundancy
Overcome the common and costly issue of data duplication.
Information transparency
Make information more accessible for all stakeholders.
Data immutability
Increase data integrity through auditable and compliant data.
Consensus mechanism
Get a method of achieving agreement, trust and security of multiple parties on a decentralized network, such as Proof-of-Work (PoW) or Proof-of-Stake (PoS).
More blockchain benefits to take advantage of.
Blockchain’s great strength is its ability to save time and money by eliminating duplicate sources of truth, as well as potential errors while providing an undisputed singular record or “ledger” which cannot be compromised without detection.
Improved security
Blockchain’s complex security features make it almost impenetrable to fraud. Changing data cannot be done without “breaking the chain” and leaving evidence for all to see. A private blockchain with permissions can only be accessed by those within the network whose identity is assured while the trading of any goods or assets cannot be misrepresented.
Increased efficiency
Reduce the time taken to finalise complex transactions involving multiple parties across different time zones from days to just minutes. Without the need for verification from a central authority, settlement can be instantaneous.
Cost savings
A blockchain network can reduce the cost of transactions in several ways:
- Because the network is governed by its own participants, there is no need for an external governance authority.
- By exchanging items of value directly, intermediaries or “middle men” are eliminated.
- All participants have access to the shared ledger hence reducing the need for duplication of records.
Trade with confidence
Blockchain’s open and transparent platform is ideal for all kinds of trading. It is particularly useful for two parties who are untrusting of each other’s intentions to do business without employing a third party.
What does this look like in real life? Here’s how blockchain could change the wine industry.
When many people think of wine production, they think of a winemaker going through an artisanal, manual process without the need for the latest technologies.
But not only can wine making be innovative, blockchain offers the industry enormous advantages on two levels.
Firstly, it can simplify the time-consuming and costly process of importing by providing instantaneous records of movement of goods to and from suppliers, wholesalers, customs and port authorities, freighters and insurers.
Secondly, it can help fight fraud, one of the biggest challenges facing the wine industry.
Experts estimate anywhere between 20-50 percent of premium wine is fake, damaging confidence in the industry as well as the reputations of iconic labels.
A recent IBM survey revealed up to 71% of customers would be willing to pay a premium for traceability of products and blockchain can achieve this.
By registering wine in the blockchain, a producer can record and monitor how the wine has been transported and stored every step of the way from the vineyard to the retailer, factoring in critical data such as temperature conditions which can significantly impact the age and quality of a wine.
This can then be cross-referenced by the consumer at the point of sale.
As you can see, the need for blockchain technology is wide and has the potential to impact every industry.
Read more:
- What is blockchain?
- Do I need blockchain?
- How to transition your company to blockchain
- How do I choose the right blockchain?
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