Blockchain applications for startups are on the rise. But most enterprise and Fortune 1000 business leaders don't know how to use this new technology to improve their business. This presentation dispells myths behind blockchain, an overview of why companies want to use blockchain, how blockchain is being build today, enterprise uses cases, the benefits of blockchain and what companies must do now to take advantage of this new technology.
2. MYTHS ABOUT BLOCKCHAIN
1. There is only one blockchain that everyone is using
2. Blockchain will change everything we know about business
3. Blockchain is Bitcoin
4. Blockchain is only for currency or financial companies
5. We aren’t a tech company, so we don’t need to care about
blockchain
April 2018
2
3. WHAT IS BLOCKCHAIN?
• Relatively new database technology that stores information
and is accessible on a network
• Not what you do but how you do something
April 2018
3
4. HOW BLOCKCHAIN IS DIFFERENT
• Database is distributed on a number of nodes (computers) in a
network
• Can be publicly available to anyone without giving permission or
privately available to select few
• Every node on the network has a copy of the database and can
read and write to it
• Each data element in the database is connected to the previous
data element
• Any changes must be accepted by nodes on the network to be
validated
April 2018
4
5. HOW BLOCKCHAIN IS DIFFERENT
Distributed on a number of nodes (computers) in a network
April 2018
5
6. HOW BLOCKCHAIN IS DIFFERENT
Each data element in the database is connected to the previous
data element
April 2018
6
7. TYPES OF BLOCKCHAINS
Public
• Any node can join the network and
read and write data to the database
• Ex. Bitcoin
Private
• Only select nodes can join a
network and must have permission
from a central node
• Ex. Corda
April 2018
7
9. WHY PEOPLE LIKE BLOCKCHAIN
• Permanent. Once the data is added to the blockchain, it
cannot be changed without changing every instance on every
node.
• Traceable. Each data element can be traced with a timestamp
and tied to the previous data element.
• Transparent. Any node on the network can see the entire
history of the database.
April 2018
9
10. PROS AND CONS OF BLOCKCHAIN
Pros Cons
Transactions are irreversible Transactions are irreversible
Assets can be transferred safely,
securely and confidentially
Manipulation can still occur at some
levels
Transactions are immutable Potentially slow performance
No need for ongoing intermediaries
in transactions
Need for ongoing consensus
mechanisms
High quality data Redundancy in consensus across
the network
April 2018
10
11. ENTERPRISE BLOCKCHAIN
MONETIZATION
• Transaction costs. Blockchain can facilitate transactions
automatically with no intermediary systems, tools or
organizations.
• Data quality. Higher quality data results in better decision making
processes.
• Employee overhead. Blockchain and smart contracts can
eliminate the need for certain human checkpoints in a process.
• Customer and partner loyalty. Enhanced quality, trust and
transparency can increase loyalty from both customers and
partners.
April 2018
11
12. SMART CONTRACTS ON BLOCKCHAIN
Definition
A software protocol contractual agreement that automatically facilitates,
verifies and acts out the agreed upon
Benefit
• No third party is needed to verify the terms of a contract or to enforce the
contract
• Lower costs with transactions, validation and processing
Use Cases
Sharing medical records. Medical records can be instantly shared between
various third parties when one of the third parties meets a predetermined
criteria. The software protocol facilitates the criteria, matching and distribution
of data.
Royalty distribution. A company can distribute royalties for digital products.
The owner, transaction, recipient and all payment information can be executed
immediately with a smart contract.
Insurance claim processing. A smart contract can augment traditional
insurance claim processing acting as the binding agreement between insurer
and the parties insured.
April 2018
12
14. Hyperledger Ethereum
Description
An enterprise-grade,
general purpose
blockchain ledger
designed to be privately
used with no currency
An open, all-access general
purpose blockchain ledger
to build mass-appeal smart
contract applications with
Ether
Permission
Private, permissioned
ledger
Public, permission-less
ledger
Token No token required Utilizes Ether (ETH)
Consensus
Practical Byzantine Fault
Tolerance
Proof-of-Work (mining)
Partners
IBM, Intel, Accenture,
SAP
Microsoft, Intel, JP Morgan
April 2018
14
15. AGRICULTURE SUPPLY CHAIN
USE CASE
IBM is working with Wal-Mart to create a private blockchain to
trace food products from origin to consumption so Wal-Mart can
quickly react to any food recalls.
Crops Storage Processing Distribution Retail Consumption
April 2018
15
16. FINANCIAL TRANSACTION
USE CASE
R3 is working with a group of financial institutions to create a
private blockchain to eliminate the need for intermediary
transaction companies for speed of use and cost savings in
financial transactions.
April 2018
16
17. QUESTIONS TO ASK WHILE
PURSUING BLOCKCHAIN
1. Which of your existing partners and what other institutions
need to participate in the blockchain to make it worthwhile?
2. How much and which data should you reveal and to whom?
3. What data do you have that might have value to others and is
there a way for you to benefit from that value?
4. Which intermediaries in your ecosystem exist simply to certify
trust or handle complexity?
5. How would new access to customers demand signals change
my operations?
April 2018
17
18. PROBLEMS BLOCKCHAIN CAN SOLVE
1. Challenges with trustworthiness between multiple parties
2. Automated transactions and decisions based on
predetermined rules
3. Chain of custody documentation in a complex supply chain
4. Democratization of privately held data
April 2018
18
20. CHALLENGES WITH ENTERPRISE
BLOCKCHAIN ADOPTION
• Nascent Technology. Blockchain is relatively new and not
proven in major enterprises. Technology talent is scarce.
• Scalability. Transaction speeds are still relatively low and may
not be able to scale to enterprise needs.
• Human Process. Data needs a source. Not all human
processes can be solved with new database schemas.
• Occam’s Razor. Many business problems can be solved with
existing database technologies. Blockchain may be an
excessive solution.
April 2018
20
21. WHAT ENTERPRISES SHOULD DO
1. Watch. Pay attention to the blockchain ecosystem and what
other companies are doing in your industry.
2. Evaluate. Evaluate your own business processes and data
needs to identify where blockchain could potentially fit in.
3. Talent. Build up internal technical talent and partner with
organizations that can deliver technical and business talent
for nascent technologies like blockchain.
4. Test. Prepare and run small-scale, proof of concepts of
blockchain for your business processes.
April 2018
21