Although the hype has passed, the world today still considers blockchain to be a big thing. Various industries have found exciting new uses for blockchain and leveraged the benefits of this technology to solve complex problems. Blockchain innovation ideas are sprouting from every corner of the world. Startups are pursuing their version of blockchain innovation ideas to reach fame and fortune. Established businesses and multi-national conglomerates are researching blockchain innovation ideas to find what it can do for them.
“The blockchain concept was pioneered within the context of crypto-currency Bitcoin, but engineers have imagined many other ways for distributed ledger technology to streamline the world. Stock exchanges and big banks, for example, are looking at blockchain-type systems as trading settlement platforms.” – Anthony Scaramucci
Blockchain is here to stay, and it has the potential to grow into the next standard for specific applications and possibly change the world as we know it.
“Blockchains for all What are these enthusiasts on about? The ‘blockchain’ technology behind bitcoin could prove to be an ingredient of an entirely new world of technology, as big as the internet itself, a wave of innovation that drives the middleman out of much commerce and leaves us much more free to exchange goods and services with people all over the world without going through corporate intermediaries. It could radically decentralize society itself, getting rid of the need for banks, governments, even companies, and politicians. Take” – Matt Ridley, The Evolution of Everything: How New Ideas Emerge
We see a lot of brilliant ideas out there and a lot of wrong ones as well. This piece is going to equip you with just enough information to assess blockchain innovation ideas and decide if they are any good.
What Is Blockchain?
There are a lot of ways to describe what blockchain is. Let’s start at the very beginning: Information.
“Blockchain verifies the information using the following steps: Consensus – it requires the majority of the block builders to agree that the occurrence actually happened. Consistency – requires that the new information fits with the previous block. Transaction – it requires that the transaction occurred by looking at the previous block, ensuring that two people did not record conflicting accounts of the information. Automated Conflict Identifiers – the software itself trolls for conflicts within the blocks and the structure. There is no centralized location, or a big computer in the sky, where the information can be altered or stolen.” – Jacob William, Blockchain: The Simple Guide To Everything You Need To Know
A set of fields of information is called a record. In a blockchain, records are stored in what is called a block. Each block contains the cryptographic hash of the previous block. In other words, if you change the information stored on the first block, the hash would change, and by comparing that with the hash stored on the second block, it would be obvious.
To make this sink in, you can imagine a set of blocks laid on one another. If you try to change a block, the whole thing will fall down.
“Blockchain technology is a form of digitalized, de-centralized public record of all cryptocurrency transactions. Blockchain was designed to record, not just financial-related transactions, but virtually everything of value.” – Olawale Daniel
How Big Is Blockchain?
So we established that blockchain technology is basically is an innovative system for recording information. Blockchain is still a growing technology and not mature yet, but even in its growing state, it has a lot to offer if applied to solve real problems. Unfortunately, a great variety of blockchain innovation ideas is a merely overcomplicated solution for easy and already solved problems.
“Blockchain is like the new big data or AI – too many people are using it as a buzzword and not focused on solving a real problem. We like to call them Blockchain tourists!” – Brad Garlinghouse
For a lot of ideas out there, blockchain is a hype word to make the solution more appealing. For others, it simply is a matter of keeping up with everyone else.
“Blockchain by itself isn’t transformational, however, it is foundational. As a foundational innovation, Blockchain’s value can only be fully realized when the business process is transformed to take advantage of its capabilities, leading to ROI (Return on Investment) for existing business models and the ability to create value through new ones.” – Tom Golway, Planning and Managing ATM Networks
Tom Golway has explained this situation very well. For established businesses, real blockchain innovation ideas should be transforming the existing business model to produce real value. For startups, blockchain innovation ideas should be efficiently solving real problems to get traction with the target audience. Anything short of this, and we can be sure that blockchain is either a marketing stunt or a waste of resources.
“Several business sectors, companies in healthcare, financial services, agriculture, as well as other entrepreneurs and solopreneurs are rushing to adopt the blockchain technology and secure their financial transactions to provide a clear record book among individuals with the digital coin’s technology, “cryptocurrency.” Meanwhile, many of these businesses are doing so basically because of the fear of being left behind (FOMO), without having crystal understanding about the basics of blockchain technology and how it should be applied to optimize their business performances.” – Olawale Daniel
What Can Blockchain Do?
There already exist various efficient ways of storing records. Why do we need this blockchain? For blockchain innovation ideas to avoid the described pitfall, we have to focus on what blockchain has to offer and whether it is something that we need.
Blockchain has three main benefits inherent to its design:
We discussed how each block contains the cryptographic hash of the previous one. This fact, alongside the majority consent required for the formation of a block, makes blockchain one of the most secure methods of recording information.
“The ledger, the distributed database – it’s called a Blockchain – is held in the cloud by all the parties involved. It can’t be broken by any of them. It’s cryptographically too strong. You would have to compromise the entire network to take over it.” – Naval Ravikant
Blockchain requires no middle man and no authorities to examine or guarantee integrity. Blockchain empowers parties to engage without the need for bilateral trust or participation of a third party.
“The blockchain is custom-made for decentralizing trust and exchanging assets without central intermediaries. With the decentralization of trust, we will be able to exchange anything we own and challenge existing trusted authorities and custodians that typically held the keys to accessing our assets or verifying their authenticity.” – William Mougayar
In the words of Vitalik Buterin, co-founder of Ethereum:
“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.”
Blockchain is what we call a distributed ledger. Every participant across the network has a copy of all the information on it. This makes every action traceable and renders verification a lot easier.
“The blockchain is all about bringing in transparency and efficiency into the existing systems which are running the upstream and downstream supply chains and making them more proactive and predictive.” – Rahul Guhathakurta, The Age of Blockchain: A Collection of Articles
Is Blockchain Needed?
When analyzing blockchain innovation ideas, take a step back and question the need for using blockchain in the offered solutions. If the added Security and Transparency alongside the Decentralization presented by blockchain, add value for the target audience, or affect the operations in a meaningful way, you might be on to some great start.
“If you think about any multiparty process where shared information is necessary to the completion of transactions, and the coordination of activity and the exchange of value, that’s where blockchain technology can be put to good use.” – Blythe Masters
Is Blockchain Efficeint?
Blockchain is very efficient if used for the right reasons and in the right applications. It provides higher speed and accuracy as well as reducing costs.
“There are a lot of really fabulous things that get done with digital assets and blockchain technologies to reduce friction, to reduce costs, and enable things that weren’t possible before.” – Brad Garlinghouse
But are all blockchain innovation ideas the most efficient ways of solving the problem?
Imagine a shopping list app that utilizes blockchain for storing the shopping items. The presenter talks about the power of blockchain and shows you stunning graphics. But what is the bottom line here? Is blockchain the most efficient method for storing records of shopping items? I think not.
“Blockchain should be used to address opportunities and problems that lack easier answers.” – Julie Sweet
From smart contacts to the distributed ledger, blockchain opens up a world of possibilities. Blockchain innovation ideas are among the likely candidates for the next world-shattering services that are going to alter our lives. That said, using blockchain for any mundane application does not make it a gold mine.