- Consensus: Blockchains record transactions on a distributed ledger that
is shared across multiple nodes.
- Provenance: “In a traditional database, someone can
delete or edit data once it is logged,” Tatro said. “With blockchain
technology, it is virtually impossible to change entries, even through devious
methods.”
- Immutability: Blockchain-based ledger entries are made
by consensus among network nodes and recorded in cryptography, using a hash for
each data block and a second hash that connects the new block to the one before
it. In business settings, organizations can use blockchains to create
tamper-proof records in which all parties involved can trust as a single
version of the truth.
- Trustlessness: Blockchain technology’s unique strengths
eliminate the need for trust in the transaction cycle, which explains why the
technology can support currency. In a blockchain, the network itself provides
the certainty that satisfies trust requirements.
Many players in
many industries have begun exploring these advantages to determine how blockchain
technology can benefit their business. As they discover the power that the
technology has to help them, many businesses grow the network that utilizes
these blockchain applications.
“Organizations are making [blockchain
technology] work in shipping and provenance applications by getting a number of
different companies together on a private blockchain,” Tatro said. “You see
alliances — one for banking, one for healthcare — because the bigger the
network gets, the more benefit you get from having a blockchain environment.”
Processes Get Faster
Beyond the
transparency and security advantages, businesses can achieve tremendous
efficiency gains by having a distributed ledger, according to Tatro.
“Companies don’t
have to worry about what information is going in their books regarding a
shipment of goods, because the same information is recorded in one place at one
time for all parties,” he said. “A lot of work goes away, and there is more
consistency in the timing. You don’t need to collect 17 signatures to get out
of port. There is a monorail for all the information.”
Many businesses are
beginning to ask whether blockchain technology would benefit their operations.
Tatro offered a four-point checklist to help evaluate blockchain’s applicability
to a given business process:
- Do you
need a network effect to bring multiple business units or organizations
together over one ledger that provides a single version of the truth?
- Do you
need to disintermediate a third party that is adding cost or time to your business
processes?
- Can
you benefit from tokenizing hard assets and passing tokens as the assets move?
For example, the airline industry can tokenize each of the components that goes
into an aircraft to maintain provenance. Parties in a supply chain can tokenize
items to track and time stamp every handoff that carries important information,
such as the temperature inside a storage container.
- Do you
need a confidential system that can be solved by tokenizing information and
storing it off the chain? Tokenization can replace sensitive information by
representing it in the form of a hash that allows for proof or attestation
without the exposure of sensitive data.
If a business sees
potential benefits, they can broaden their understanding by doing research,
taking a course and/or hiring a consultant, Tatro added.
