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.

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.

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:

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:

About the Author: 

Samuel G Brooks is Block8's Chief Technology Officer. He is an expert in developing decentralised software products and has designed numerous solutions for startups, enterprise, government and OpenTech since 2014.

Samuel regularly speaks at technology conferences, meetups and podcasts, and holds several advisory positions on technical industry boards and committees. He is a also a heavy contributor to blockchain and fintech-related public inquiry and writes about the nature and benefits of distributed ledger technology on our blog.

Samuel holds a degree in Electrical Engineering from UNSW, and has stayed close to both the code and the latest research ever since encountering Bitcoin in 2011.