Is Blockchain a Key Technology for the Future?
That’s the question Big Four firms Deloitte and PwC are answering in new research.
By DERRICK LILLY |
The truth is, blockchain is already
getting much use today — far more, in fact, than just what you
hear about around cryptocurrencies.
According to a PwC survey
of 600 executives in 15 countries, 84
percent have active blockchain initiatives underway. Digging a little
further into that number, 15 percent have a fully live blockchain
project; 10 percent have a blockchain implementation pilot in
progress; 32 percent have a blockchain project in development;
and, while many other respondents are researching or evaluating
projects, just 14 percent have no activity in place.
“Blockchain is getting closer to its breakout moment with every
passing day,” says Deloitte’s report on the findings of its 2018 global blockchain survey
. In its global survey of “more than 1,000
blockchain-savvy executives from seven countries and nine
industries,” 74 percent of all respondents see a “compelling
business case” for the use of blockchain — many of which are
already being acted on.
Deloitte found 34 percent of its respondents already have
blockchain systems in production, and another 41 percent say
they expect their organizations to deploy a blockchain
application within the next 12 months.
There’s also plenty of capital flowing into blockchain R&D —
nearly 40 percent of Deloitte’s respondents said their
organizations will spend $5 million or more on blockchain
technology in the coming year.
“As more organizations put their resources behind this emerging
technology, we expect blockchain to gain significant traction as
its potential for greater efficiency, support for new business
models and revenue sources, and enhanced security are
demonstrated in real-world situations,” Deloitte reports.
“A well–designed blockchain doesn’t just cut out intermediaries,
it reduces costs, increases speed, reach, transparency, and
traceability for many business processes. The business case can
be compelling, if organizations understand what their end game
is,” says PwC Blockchain Leader Steve Davies.
Therein lies the challenge. In reporting on the matter, Ken Tysiac,
FM magazine editorial director, explains: “Blockchain is a
distributed ledger technology that enables an internet-based
peer-to-peer network to facilitate exchanges in value. Computers
on the network simultaneously verify and record transactions,
which are able to be completed without a traditional intermediary
such as a bank or credit card network.
“The technology, which provides the underpinning for
cryptocurrencies such as bitcoin, has numerous potential uses
in many industries. The technology has an obvious immediate
impact on financial services, which was identified by 46 percent
of the PwC survey respondents as the leading sector in
blockchain development. Manufacturers also are finding
blockchain to be helpful in supply chain management.”
The point is that developing blockchain platforms must be
thought out in great detail to succeed in any given industry.
In “4 Tips for Developing Blockchain Platforms,”
Tysiac calls out
the following key areas of focus from PwC’s report:
1. Making the business case.
The purpose of the initiative
needs to be clear and well-conceived so it can move forward
2. Building an ecosystem.
Different companies in an industry
(and perhaps even competitors) may need to work together
to develop a common set of standards to govern blockchains.
Nearly all (88 percent) of the survey respondents with live
blockchain applications in the PwC survey were leaders or
members of a blockchain consortium.
3. Designing deliberately around what users can see and do.
Legal, compliance, and cybersecurity experts can help
blockchain users develop rules and standards for access
permissions that will engender trust in the technology.
4. Navigating regulatory uncertainty.
requirements will evolve on blockchain, companies may fall
behind their competitors if they avoid the technology while
waiting for rules to be developed. Engaging regulators as they
develop standards can help blockchain users anticipate their
Is your organization developing a blockchain platform? If so, tell us about it