The media is brimming with stories about boom, bust and Bitcoin bubbles. The first thing to remember is: Bitcoin is controversial, Blockchain is not. Bitcoin, and most cryptocurrencies, are volatile. Blockchain is not it’s achieved a wide consensus as what the Harvard Business Review calls the foundational technology for the future of the internet, because it changes the game.
The implication for ambitious SMEs
If blockchain technology is going to transform the internet, as first the web and then e-commerce did, then “what do me and my business need to know right now and in the near future”, I hear you ask.
As various commentators have pointed out, Blockchain is where the web was in around 1995 or so. This was when Microsoft CEO Bill Gates responded to developments with a “five-alarm” internal memo titled The Internet Tidal Wave, that gave the highest level of importance to this change to the business environment.
For Microsoft this was an existential crisis. A change emanating from its business sector that would change the environment for everyone and so the ground-rules that dictate what fitness for survival is in the coming era.
The Blockchain tidal wave
While I?m no Bill Gates (although I was ahead of him at the time, telling anyone who?d listen how transformative the web would be and again with even pre-Napster for the music industry) this is my equivalent for you and your business.
The Blockchain tidal wave is coming, amply funded by its own, new, funding mechanism, the ICO capable of delivering tens or hundreds of millions to those who understand Blockchain’s potential and have the best ideas for transforming business sectors – and so the companies within them.
Inevitably there will be winners and losers. Those who move centre stage by riding the wave and those unable to understand and adapt soon enough, who will inevitably go the way of Kodak.
Will my business be affected
Because Blockchain technology changes some seemingly fundamental rules it has many applications and use cases. There are dozens already, with more than 200 ICOs presently funding and a further 1,000 or more actively developing services, new ones are being explored all the time.
Apart from every area of transacting and finance, which will of itself affect us all, these include areas such as asset management, resource sharing, identity and security, fractionalisation and mobilisation of assets in diverse areas ranging widely through tech to sport and the arts.
Why so diverse
This is because of the changes that Blockchain brings to familiar ground-rules. When we move money around the country or the world we are used to finding, trusting and paying a bank to take care of this for us.
In many areas of life and business we need to “take on trust” that the middlemen will play fair, and stick to the rules. Or if they don’t they will be caught and brought to book, so that it’s in their interests to do so.
Because the blockchain itself embodies and operates the agreed rules in a way that is transparent, verifiable, immutable, and for all practical purposes invulnerable to subversion, blockchain technology not only abolishes the need for a middleman to mediate but changes the way transactions work altogether. Reducing the number of people involved, removing friction and cost while leaving an immutable record of everything, which means it’s all verifiable.
So there is no longer a need to have or trust a middleman. A central, programmable, transparent online system which applies the agreed rules makes the middlemen redundant sweeping away a swathe of cost and delays as well as the opportunity for fraud or other malfeasance.
That’s not to say, however, that in this big-shake up there won’t be plenty of opportunities for innovation or leadership. Quite the reverse, but they will have a different character and emphasis, as we shall see.
Those who can enable and help transacting parties to find each other and structure and enable their transactions (think Uber or AirBnB) will thrive rather than disappear. Those who play to the strengths of this new technology will do best.
Next time we ll look at what Blockchain is from the SME perspective, and what it means for businesses like ours. We understand that some people are perplexed and puzzled by the Blockchain and all it’s works. If you’re among them, or if you just need to know what the impact will be for you, your business or sector, click here and we ll answer your questions in this column and at ICOrad.io in the coming days.
The #BlockchainBytescolumn is in association with ICOrad.io. It is a weekly series written and hosted by author Barry E James to build public, especially SME’s, understanding of the possibilities, opportunities and business threats created by a fast moving revolution that’s shaping our future.