What We’ve Learned So Far About Blockchain for Business
The biggest challenge to companies creating blockchain apps isn’t the technology — it’s successfully collaborating with ecosystem partners.
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Image courtesy of Dan Page/theispot.com
It’s understandable why many businesses have been slow to invest in blockchain. For the past few years, the C-suite has been showered with suggestions about navigating the next wave of blockchain innovation, identifying potential use cases across industries, and preparing for a blockchain future.1 On the one hand, executives have been warned about blockchain’s potential to disrupt business models, disintermediate trusted third parties, and “change the very nature of economic, social, and political systems.”2 On the other hand, leaders have been cautioned about blockchain’s hype and hidden vulnerabilities.3 But doubts about blockchain are fading, according to a Deloitte survey, which found that more than half of senior executives place blockchain among their top five strategic priorities.4
Blockchains are shared software applications that validate and create tamper-resistant records of transactions among participants in the network. At their core, blockchain applications enable programmable rules for value exchange and shared record-keeping. Everyone in the network agrees on what has happened because they’re all working from the same record. Bitcoin, released as the first live blockchain application in 2009, was a powerful proof of concept, but its use as a cryptocurrency initially deterred many enterprises from adopting it. Executives did not see the relevance to their businesses: They feared that cryptocurrencies’ anonymity would limit compliance with anti-money-laundering and know-your-customer laws, or they believed that the technology was too immature and unstable to meet enterprise requirements. Now, with pioneering enterprises reaping business benefits, more companies are ready to explore what blockchain can do for them.
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We’ve studied over a dozen live solutions in use across a range of industries and a variety of companies, including solutions to track shipping containers, trace food from farm to fork, authenticate pharmaceuticals, and compensate content creators. (See “The Research.
References
1. M. Ferguson, “Preparing for a Blockchain Future,” MIT Sloan Management Review, Sept. 11, 2018, https://dev03.mitsmr.io; L.W. Cong and F. Klotz, “Navigating the Next Wave of Blockchain Innovation: Smart Contracts,” MIT Sloan Management Review, Sept. 26, 2018, https://dev03.mitsmr.io; and T. Felin and K. Lakhani, “What Problems Will You Solve With Blockchain?” MIT Sloan Management Review 60, no. 1 (fall 2018): 32-38.
2. M. Iansiti and K.R. Lakhani, “The Truth About Blockchain,” Harvard Business Review 95, no. 1 (January-February 2017): 118-127.
3. S. Madnick, “Blockchain Isn’t as Unbreakable as You Think,” MIT Sloan Management Review 61, no. 2 (winter 2020): 66-70; and C. Catalini and P. Michelman, “Seeing Beyond the Blockchain Hype,” MIT Sloan Management Review 58, no. 4 (summer 2017): 17-19.
4. “Deloitte’s 2020 Global Blockchain Survey: From Promise to Reality,” Deloitte, June 16, 2020, www2.deloitte.com.
5. For an in-depth case study on the development of TradeLens, see T. Jensen, J. Hedman, and S. Henningson, “How TradeLens Delivers Business Value With Blockchain Technology,” MIS Quarterly Executive 18, no. 4 (December 2019): 221-243.
6. M.C. Lacity, “Blockchain Foundations for the Internet of Value” (Fayetteville, Arkansas: Epic Books, 2020).
7. R. Van Hoek, B. Fugate, M. Davletshin, et al., “Integrating Blockchain Into Supply Chain Management: A Toolkit for Practical Implementation” (London: Kogan Page, 2019).
8. J.V. Micallef, “What’s in Your Cellar? Counterfeit Wines Are a Multibillion Dollar Problem,” Forbes, Dec. 1, 2018, www.forbes.com.
9. G. Perrone, “Restoring Trust in the Wine Industry, From Grape to Glass,” Ernst & Young, 2018, www.ey.com.
10. S. Gupta, S. Duncan, T. Mondal, et al., “HFS Top 10 Enterprise Blockchain Services 2020,” HFS Research, April 24, 2020.
11. S. Somerville, presentation at the Sam M. Walton College of Business Blockchain Center of Excellence Workshop, Fayetteville, Arkansas, June 6, 2019.
12. N. Morris, “Automated Trade Payments Prove Popular for We.Trade Blockchain,” Ledger Insights, January 2020, www.ledgerinsights.com.
13. Iansiti and Lakhani, “The Truth About Blockchain,” 118-127.
14. S. Wass, “We.Trade and Batavia Merge Blockchain Platforms for Trade Finance,” Global Trade Review, Oct. 3, 2018, www.gtreview.com.
15. “The Launch of eTradeConnect and the Collaboration With We.Trade,” Hong Kong Monetary Authority, Oct. 18, 2018, www.hkma.gov.