Blockchain is the general ledger system that is on the minds of almost every executive, investor, or tech analyst out there. And, there’s good reason for that. It has the ability to provide an open, global system of records for each transaction, while offering unparalleled control over it, which all comes together to inch the business world closer to an era of digital transformation.
When iPhone came to the market in the year 2007, it was like the beginning of new decade of mobile technologies. It led to the creation of such app ecosystems who effects still resonate in the business world of today.
But, this is nothing compared to what the future holds for blockchain technology. In fact, the ability of blockchain to influence the future of technology has been compared by many with the advent of internet. And, there’s a reason why we started off with this iPhone analogy. After all, mobile technology is going to have a major bearing on the widespread use of blockchain.
So, what does the future look like for digital transformation using blockchain technology? Let’s find out!
Blockchain will render many business models obsolete
When it comes to digital transformations, the most successful transformations have been the ones with the right strategy, and not solely the right technology. Research has shown that the businesses that embraced this transformation are the ones who focused on formulating a digital strategy, which involved new business models, culture, talent, and processes, and not only technology.
Bringing blockchain in an organization leads to many basic changes in a business. These changes in businesses are way bigger compared to the technological challenges of implementation.
A major challenge, in this case, is that the curve for business adoption is lengthy. People have only seen organizations experiment and invest in technology, but it is rarely seen that an organization is ready to have a discussion about re-conceptualization of the business depending on the blockchain technology because not all executives can take that leap.
Then, there’s this challenge of focusing on technology relentlessly. Startups end up promoting that their service or product is based on blockchain only to get media attention and draw in venture capital. At the same time, the established digital transformation companies also try to draw the spotlight towards the latest POCs depending on blockchain technologies. Thus, both the established companies and startups are missing out on the basic conversation organizations must have about the value of re-architecting and re-conceptualizing the business for the future world of blockchain domination.
For instance, there are organizations that invest heavily in hiring employees with some experience in cryptocurrencies or blockchain. The companies want to bring together a strong team for exploring opportunities and making realities out of concepts.
In fact, this whole idea of POCs and investments has first brought to you by fintech companies and banks. Every tire of certain financial organizations have been using blockchain technology since the year 2015. But, till now, very few of the POCs have been able to make any considerable change in the banking sector. Many of the organizations are still find its implementation difficult.
Beginning of the next generation of startups
Enterprises might be the ones investing the most amounts of money in blockchain technology right this moment, but it is the startups that are in the best position to derive the benefits of it in future. This is due to the immense change that is all slated to come and hit us. There will be this new wave of disruptions, a lot like how Uber and AirBnB came about
However, while you might consider certain companies changing the business as something normal, the rise and rise of businesses depending on blockchain will put many companies in the threat of extinction. The reason behind this is that there are companies that still function on centralized networks, in other words, the data exchange takes place through a centralized server.
The modern startup businesses will rely on peer to peer exchange that will depend on the blockchain network. With these new-age startups being created on blockchain, they will not have to deal with the major upheavals that other organizations will face before implementing the technology.
The ease of creating blockchain businesses by executives and entrepreneurs
When blockchain came into the picture for the first time, it was hard for the developers to create applications using this technology. Even the executives found it difficult to figure out the implications. A significant amount of specialized knowledge is needed in this case.
The initial adopters of this technology were the individuals who were interested in the open source model, with a fair understanding of various architectures, and a genuine interest in blockchain’s potential.
The situation is still quite complicated, but it has undergone some major changes. The present open source platforms, like Ethereum, help the entrepreneurs to easily build up blockchain businesses. It is easy for the executives to start reimaging present business procedures. The technology is maturing rapidly, and it is becoming easier for the individuals to reconsider business designs and models, and think about the ways of reimagining the business on blockchain platforms.
Conceptualizing businesses in the blockchain world
The executives considering blockchain need to begin with an application. The thing is, the easiest way to begin is to go for single-use applications that reduce risk component because they are not new. These applications have minimum coordination with the third parties. Adding bitcoin as the payment mechanism is a good strategy in this regard.
But, a different perspective is taken by us because of the results noted from the approach mentioned before. It is important to pay attention to the foundational variances in the business designs between blockchain and traditional businesses. It is all about understanding the abilities enabled by the blockchain technology, designing the business models to exploit the capabilities, and building new business models that can come into the market with all the benefits that blockchain can offer.
Because blockchain leads to a paradigm shift in the model where value does not come from gather data in the traditional value chains, but rather from the services delivered in the peer to peer environments, you will get to setup business in this new era without being drawn backward by centralized business designs.
In order for companies to understand what blockchain means for their business and industry, they need to reevaluate the basics of the business and the ways through which blockchain technology changes it. It is advisable to not waste money by building a POC immediately. It will only act as the marketing material to show you are using blockchain, but it will not be of much help to your business.
There is no denying the fact that blockchain is an emerging and new technology. There has been a lot of discussion in the technology circuits regarding the importance and impact of the open-source platforms, but hardly any other open-source platform comes with the power or potential of blockchain. But, starting blockchain initiatives mean considering the way your business and the industry is going to look like in the years to come, and the way this technology can help you in changing to provide improved services to the customers.