Among the items highlighted in accounting and professional services giant Deloitte’s “Tech Trends 2018” report were new business opportunities and creative ways of solving problems with emerging technologies, including machine learning, the Internet of Things (IoT), digital reality and, of course, blockchain technology.
In November, Deloitte published a report covering six control principles essential for blockchain adoption on a global scale. In response to customer demand, Deloitte, which is one of the “Big Four” accounting organizations (along with PwC, EY and KPMG) and the largest professional services network in the world by revenue and number of professionals, is increasingly focusing on distributed ledgers and enterprise applications of blockchain systems.
“Tech Trends 2018” included a section titled “Blockchain to blockchains: Broad adoption and integration enter the realm of the possible.” The Deloitte analysts call the reader’s attention to Gartner’s prediction that distributed ledger technology’s business value-add will grow to $176 billion by 2025, and the argument that blockchain technology is on a clear path toward broad adoption, with use cases of increasing scope, scale and complexity.
For example, Europe’s largest shipping port, Rotterdam, has launched a research lab to explore blockchain applications in logistics. Utilities in North America and Europe are using distributed ledgers to trade energy futures and manage billing at electric vehicle charging stations. Blockchain technology is disrupting social media by giving users an opportunity to own and control their images and content. Enterprise distributed ledger solutions are being developed by major industry groups: Quorum, developed by JPMorgan, is an open-source, enterprise-ready blockchain and smart contracts platform created specifically to meet the needs of the financial services industry. The Hong Kong Monetary Authority (HKMA), the Hong Kong Applied Science and Technology Research Institute, and partner firms and organizations are leveraging distributed ledgers to develop proof-of-concept (PoC) smart platforms for trade finance, mortgage applications and digital identification.
The recommendation given to companies that are considering distributed ledger deployment in support of business needs are, essentially, similar to those given in a previous Deloitte report: it’s important to focus distributed ledger projects on clear, business-related use cases, plan for integration of separate blockchain components in an overall business value chain, and push for standardization and interoperability. With standardized distributed ledgers, enterprises would be able to share blockchain solutions more easily, collaborate on common solutions and develop technical talent.
“Our view is that blockchain [technology] makes sense only if you have common standards for interacting digitally, like those developed for the internet,” noted Michael Eitelwein, head of group enterprise architecture at Allianz, a global insurance and asset management firm. “If by working together we can eventually create common standards for blockchain processes, we will be able to remove a lot of inefficiency from digital business.”
It’s important to note that distributed ledger standardization is still incomplete but ongoing. Deloitte invites its prospective clients to consider whether they should wait for blockchain standards to be defined by their competitors or adopt a proactive approach to distributed ledger standardization. Eventually, standards-based, interoperable blockchains will mature, with new protocols that support communication between different technologies becoming broadly available.
“With the initial hype surrounding blockchain [technology] beginning to wane, more companies are developing solid use cases and exploring opportunities for blockchain commercialization,” reads Deloitte’s report. “Indeed, a few early adopters are even pushing PoCs into full production. Though a lack of standardization in technology and skills may present short-term challenges, expect broader adoption of blockchain [technology] to advance steadily in the coming years as companies push beyond these obstacles and work toward integrating and coordinating multiple blockchains within a single value chain.”
While the section of “Tech Trends 2018” directly focused on blockchain technology offers plenty of interesting considerations and practical advice, considering distributed ledgers in combination with the other emerging technologies and trends discussed in the report may be even more interesting.
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