AVOID GETTING STRANGLED BY BLOCKCHAINS
Previously in the Disrupt or be Disrupted post I discussed how the technological advancements will disrupt various business models in the coming days and used Uber as an example. Since our organization is currently working on Blockchain based products, it is a good idea that we explain why we chose to invest in the technology.
What is Blockchain?
Blockchain is a type of distributed ledger in which records of transactions are kept in immutable blocks. Each new block is created by a software called “Miner”, after receiving the transactions to be stored. Once a block is created and verified it cannot be modified. The new block points to the previous block so that all the transactions can be traversed and hence the name “Blockchain”.
In a public and open Blockchain the miners are millions of computers running all over the world. These computers are incentivised so that they continue to run and keep the whole process running. The most common of these incentives is a token of virtual currency that can be traded for the purchase of goods and services like any other currency. For each block that is generated and verified, a set of currency tokens are awarded to the miner. There is a lot more to it but for the purpose of this blog I will keep it simple.
What is it good for?
Apart from digital currency like Bitcoin the Blockchain technology can essentially remove the need of intermediaries in several business models that includes banking, land registry, bidding, escrow, money transfers, academic records, voting, ride hailing, trading, insurance, loyalty programs, inheritance, charity etc. The distributed nature of Blockchain makes it robust as network failures, elements and extreme circumstances cannot destroy the vast number of machines involved in running of the network. This technology is likely going to disrupt and strangle some of the existing business models. It will unleash a plethora of new tools and services that will create stronger, shorter and smarter bridges to solve some of the existing problems faced by the businesses and individuals.
Our current development
In Blockchain technology is focusing on a Bitcoin exchange platform for a couple of clients and an Ethereum based platform for our own start up that will be revealed in the coming days. The reason why we chose Ethereum is that this platform allows creating a variety of solutions on top of its Blockchain implementation. The applications for various industries as discussed earlier can be created on this Blockchain as the creators have already done most of the challenging work for us.
The Ethereum platform provides a virtual machine that can execute commands like a computer. These commands/programs known as smart contracts can be created using its own programming language called “Solidity” and will exist on the Ethereum network unless they were programmed to self-destruct. The most important of all features of Ethereum is a Decentralised Autonomous Organization (DAO). A DAO runs through rules defined by smart contracts and its transactions are maintained in the underlying Blockchain. My interest in DAO like organization started when after studying the disrupting effects of Uber like businesses and the resulting unemployment that they would create. I was looking for a business model that has the benefits of Cooperatives, Crowdsourcing and Democratic unions such that the businesses stay human focused and yet be competitive at the same time i.e. disrupt the business model itself. I pondered on the solution for more than a couple of years till I stumbled across the DAO last year.
The Ethereum public Blockchain and its private implementations have the potential to power most of the future business models that will disrupt the existing services. Another of its advantages is that it is backed by several industry giants and has better procedures for conflict resolution when it comes to bringing new features/fixes to the Blockchain. Of course, that was after some hard lessons learned during its early experiences. Many industry experts believe that it will not be long before some Blockchain based implementation makes a lot of industry procedures redundant by creating bridges between customers such that there are no intermediaries.
The only way to stop getting hurt by a disruptive technology is to disrupt it further and if you cannot disrupt this further at this moment and time then join the disruption before your competitor does.
For any Blockchain related work or question please consult our team at sales(at)mparsec.com