Block8's Chief Technology Officer
20.07.2020. in Technology, Thought Leadership, Solutions, ProductDistributed ledger-based systems are sets of participants (in a network) agreeing on a single version of the truth about some piece of information and associated data, including:
The key feature of using a distributed ledger application over a regular web or “centralised” application, is that a distributed ledger requires no single, controlling provider of the information (agreed truth). This either eliminates the need to pay intermediaries to facilitate a business-to-business transaction, or eliminates the need to reconcile and verify data before you can rely upon it for use in a business process.
As illustrated in the image below, through the use of technology, we can directly connect to our counterparties and operate on a fundamentally cheaper and more autonomous basis:
When extended and applied to a market (lots of buyers connected to lots of sellers), we also avoid centralised data collection and market power imbalances which can be particularly compelling for business-to-consumer use cases.
Key Takeaway: “Properly leveraging DLT ultimately comes down to three core benefits: reduced cost, reduced processing time, and real-time business data.”
Blockchains give us the ability to reliably share the truth about the ownership of (rivalrous) rights and assets, as well as the current state of any shared process between two entities (non-rivalrous). This core ability to share truth endows system architects, business analysts and product designers with an ability to automate relationships as opposed to internal, isolated processes.
So what are the benefits that we can expect from implementing blockchain? They are found in business processes, operational transparency and product relevance. For example, operational risks are currently mitigated by auxiliary, expensive and slow business processes, whereas blockchains can be programmed to execute business processes with far greater speed and reduced risk and complexity that ultimately minimises cost. Here’s a breakdown of the uses for blockchain across process improvement, data transparency, and company relevance:
Dimension |
Business Challenge |
DLT Application |
Benefit |
Process |
Slow and expensive reconciliation processes |
Use a consensus system over a messaging system |
Faster Cheaper Real-time Reduced Op-risk |
Process |
Manual operation of inter-business relationships |
Map the business process and translate the workflow into a smart contract |
Faster Cheaper Real-time Reduced Op-risk |
Process |
Redundant processes across suppliers, customers, peers |
Agree on a process standard and deploy the smart contract on a shared blockchain infrastructure |
Cheaper Simplified business More competitive |
Transparency |
Difficulty in tracking deliveries and inventory |
Use a distributed ledger to record the inventory moving along the supply chain |
Reduced Op-risk More competitive |
Transparency |
Limited transparency both up and down my supply chain preventing data driven insights |
Leverage smart contracts with your suppliers and customers in order to look-through previously opaque sources of information |
Reduced Op-risk More competitive |
Relevance |
Need to remain relevant and to understand technological disruption risk |
Investigate ways to increase profit through operational cost reduction leveraging blockchain, or consider new products or transparency features for existing products. |
Faster Cheaper More competitive New markets |
Reduce Time: Improve Legacy Processes
Reduce Cost: Make More Money
Reduce Risk: Make Better Decisions
Get our handy infographic which has information about how to use blockchain, the benefits of blockchain and how to implement distributed ledger technology:
About the Author:
Samuel Brooks is an expert in connecting next-gen technology with current-gen business problems, with particular specialisation in the development of distributed ledger systems, having designed many DLT-based solutions and authored and contributed to multiple public submissions from both industry and government.
He is also an active member of the Australian blockchain community, including regularly speaking at technology conferences, meetups and podcasts, and contributing to industry and International Standards committees.
Samuel holds a degree in Electrical Engineering from UNSW and has been working hands-on with blockchains since 2014.
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