Samuel G Brooks
Samuel G Brooks

Block8's Chief Technology Officer

20.07.2020. in Technology, Thought Leadership, Solutions, Product

The Three Core Benefits of Blockchain

Why Blockchain?

Distributed 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:

  • Assets
  • Rules
  • Processes
  • Identities
  • Rights and licences
  • Public or historical records

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.

BLOCKCHAIN EXPLAINED

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:

Blockchain enables instantly synchronised ledgers

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.

Blockchain Benefit Areas

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

 

Bottom Line Benefits of Blockchain

Reduce Time: Improve Legacy Processes

  • Eliminate data silos and reconciliation processes
  • Create transparency amongst trusted groups
  • Automate business processes such as billing and settlements

Reduce Cost: Make More Money

  • Improve data accuracy, insight, transparency
  • Automate audit functions
  • Implement smart contracts to manage multi-party workflows

Reduce Risk: Make Better Decisions

  • Explore digital assets with suppliers, customers and competitors
  • Leverage shared industry data systems, such as registers of public info and digital identity

 

Get our handy infographic which has information about how to use blockchain, the benefits of blockchain and how to implement distributed ledger technology:

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About the Author: 

Samuel_Brooks_Block8_CTOSamuel 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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