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What will be the effect of blockchain on businesses?

Aaron Serrhat
16/11/18

We’ve already covered the fundamentals of blockchain in our previous articles (Blockchain – is it the future? and What’s the next step in Blockchain technology?), however, it’d be good to outline its key aspects.

A blockchain is a public ledger of transactions or interactions, stored in chronological order. Imagine a digital version of the spike where a cashier puts receipts on top of each other. A 'block' contains the details of multiple transactions as well as a shorthand code for the information in the previous block, so every block knows exactly what the block before it should say and so on, which forms the 'chain'. This means that if you try to amend an old transaction, the following block will show a discrepancy and disrupt the entire chain. You would have to amend every following transaction to hide the discrepancy. This is what makes the information in a blockchain permanent.

Publishing a single block requires a significant amount of computing power, to ensure multiple blocks in the chain can't be amended instantly. Each system has its own blockchain, and anyone, or any business can set one up. The main benefit to businesses is that a blockchain is a tamper proof record, which everyone can verify and contribute to.

Here are a few examples where blockchain has already made a difference and where it could potentially have an impact:

Ensuring Quality in a Production Line

A supply chain requires data input from many people at different stages of the process. This involves a lot of trust from customers that each stage has been performed correctly, which usually involves a spreadsheet that people have to enter and verify, and anyone can edit afterwards. Blockchain can integrate with scanners and technology, instantly uploading and securing information about products and where they are in the production chain, available for anyone further down the process to keep updated or for stakeholders to stay informed. For example, if a frozen goods truck was over a certain temperature during the journey, a temperature sensor can upload an un-editable record and notify the receiver that the contents might be unsuitable to sell. 

Blockchain also means that suppliers can use complex verification codes to confirm the produce leaving their facility is theirs. This helps to avoid duplicates and inferior products being packaged and sold as the quality products. This is a benefit for the customer but also for the supermarket that they can verify their ethical and certifiable sourcing process.

Time Saving on a Large Scale

Microsoft use a number of blockchain systems across their operations. The traditional process of verifying the sale of a digital subscription for businesses was time-consuming and required many manual steps. Since blockchain allows many people and automated processes to contribute data simultaneously, Microsoft were able to reduce the process of issuing licences from 3-5 weeks, to 3-5 days.

Decentralised Storage

When you store files with Dropbox or Google drive, it goes to their servers, they hold 100% of the file in one place for you, when you log in somewhere else, it's available for you to access. This is convenient but not very secure and reliant on the speed you can connect with Google’s servers. A new system, reliant on blockchain, called ‘decentralised storage’ is being tested. There is no central party to hold your data. Fragments of your file are distributed to a number of other users, with a permanent untampered record of what's gone where, then, when you try to access it from another device, it will automatically pull all the pieces back together, de-crypt them and you'll have your file.

A large benefit of this is security, the encryption key stays on your device so there’s no way for anyone to pull together the millions of pieces of the file and access it. It’s also faster because it saves on data being transferred, instead of millions of people trying to download massive files all through Google, you’ll be receiving microscopic files from a number of sources. This means anyone with spare storage, business or individual can rent it out and allow systems to store fragments of data. Saving money for the customer because there’s no huge company in the middle to pay, just each other.

Blockchain is pretty mindboggling, people are finding new uses for it every day and working out how to integrate into our lives and businesses. When it's used effectively it can revolutionise processes which already seem to be fully-optimised and it can bring a new level of security and trust to whole industries. Are you keen to explore the future of computing and technology? We’re always looking to work with ambitious people who have big ideas for what the future can bring. Take a look at our opportunities here.

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