You need a Blockchain strategy and your company needs one…
Here is the thing. You can either embrace Blockchain or ignore it believing it to be hype. You can go through the motions and create great theatre by pretending your organization is doing Blockchain stuff and that you are also buying into the ethos. You may believe having a Lab, starting a Proof of Concept, and appointing a Blockchain Czar is enough to convince those around you that Blockchain things are happening…
To me, this is nothing more than a bit of foreplay unlikely to get anyone excited. 90% of what is going on in organizations around Blockchain is complete guff and you will see a far better theatre in Soho’s West End!
Banks are hoovering up Blockchain, Bitcoin, and Solidity resources in a mad panic not to be left out in the cold. Insurers are awaking from a deep hibernation and will probably go back to sleep as another tech wave passes by, and others in Capital Markets, Asset Management, Custody, Healthcare, Logistics and Supply Chain businesses are having their epiphany moment, realizing doing nothing is not an option.
But do they really see it? Many organizations are being led down the garden path by old consultants who all of a sudden claim to help organizations develop, test and get Blockchain concepts going… Where did they get these skills and knowledge? These same firms are buying their way in to becoming members of everything Blockchain, members clubs, closed consortia but do they really know the difference between foreplay, a bit of bondage and torturous restraint, where they are really in search of the dominatrix role over you and your organzation.
Although technically having never done Blockchain or spent any Bitcoin that was until recently was seen a bit off piste for them, they are now encouraging customers to create their own plug play and punishment rooms as Labs and Proof of Concepts and offer a full array of toys for testing, development, and writing smart contracts. Along with IBM and Microsoft, they appear to be offering their versions of things that are a far reach from Satoshi’s origins. The motive it seems is to get willing clients locked into their tech and a Blockchain as a Service model, which isn’t the outcome required.
There are also pureplay Blockchain businesses (semi startup) run by computer scientist and crypto entrepreneurs working on the next super version of the Blockchain, seeking clients’ income to bring their projects to life. Each claiming to have the best shade of Blockchain that has solved the scaling and throughput challenges and claim to get clients off.
Without doing those that are building real stuff a disservice, nor decrying what they have already achieved, with any new emerging technology the level of nonsense and faking it becomes quite excruciating to those of us that are already creating and building a Blockchain future.
How do I get my kicks?
Simply put, Blockchain is the key to a very different future, an open source software code and distributed ledger technology that supports cryptocurrencies (Bitcoin) that provide the tools to deliver different business operating models and outcomes. The rules of this technology offer new ways of solving tomorrow’s problems that weren’t their yesterday.
Bitcoin or any of the other crypto-currencies (of which there many), Blockchain or any number of distributed ledger versions, Smart Contracts or what some call transaction logic, are the building blocks to be deployed as part of an overall architecture, or as I call it a Blockchain business model. You get a new set of toys to play with that don’t follow conventional thinking.
To find out other Shades of crypto and Blockchain I list the primary projects and consortia in this link paper titled: Blockchain goes Mainstream https://channels.theinnovationenterprise.com/articles/blockchain-goes-mainstream
Is Blockchain Pain or Pleasure or both…?
I have spent a considerable amount of my career working in tech, business process outsourcing and re-engineering, and latterly in digital transformation (which simply isn’t, more guff and nonsense) and follow the reasons people buy new tech.
– At the heart of Blockchain is a cost out play enabling organizations and industries to remove 50% to 90% operating costs. Industry Platforms are a case of build it and they WILL come, and for me the most likely winners in the Blockchain race
– Second Blockchain is an efficiency play by removing underlying friction and non-value added roles/activities to do with checking and re-checking, validating counterparties and who is at each end of a transaction. Interesting given compliance is a huge cost of doing business mostly falls away
– There is the transparency opportunity from improved security (fault tolerance) of information and transactions that cannot be changed after the event delivering instant audit and verification. This has enormous impact on the opportunity to forge new propositions to deliver confidence, better experiences and reach customers that have lost faith and trust in what is on offer today
What if I choose Pleasure…
Implementing Blockchain is complex, requiring a great deal of thought, planning, and preparation. But most of all, it requires that those who don’t yet know the difference between Pain and Pleasure experience Blockchain to come up with a vision of the future, a template of what success looks like and focus on the outcomes they would like to see.
Improving cycle time (removing friction and time cost), better transparency (therefore trust), lower costs (better value) and ease of use (convenience) become attractive options as advantages that can be deployed to eliminate competitor and drive volume towards you.
These are things Blockchain offers but can you envision it…
Most people cannot.
What are your Hang Ups: understanding the business problem to be solved?
Hence the theatre around Proof of Concepts is paper thin, and mostly a waste of everyone’s time. Blockchain requires a fundamental change to corporate thinking, to structures and the nature of organizational governance, management theory and behaviors. It is more operating model redesign than a sticking plaster solution, it challenges how decisions are made and authority lines, and lays bare all costs and exposes customer propositions for what they are. And this happens all at once.
As Peter Thiel mentions, the game is not to compete at all, it is to dominate and create a monopoly position in a sector. Blockchain is the answer, the toolset, and the platform to get you there, but can you articulate the problem sufficiently well to create the opportunity?
Asset Management is a perfect example. There are some bright people I know building an Industry Platform that will day one reduce costs by 70-90%. What will be the effect of pricing that is more than 50% cheaper? Let alone the other intrinsic benefits Blockchain delivers in terms of transparency, security and smart contracts that execute the rights and decisions of the asset rights holder. This is a Game Over scenario…
Organization versus Industry
The battle lines for Blockchain are drawn. I have always looked at new tech in terms of determining very quickly what changes, what are the things I can do that before I could not. What things are unlocked and now possible that weren’t there before? How does this change business models and the relationship with markets and customers? How can I exploit the tech to control the market?
Any fool can play with tech for technology’s sake and spend millions on delivering nothing very much. Large organizations fall for this all the time with enterprise software that promise much and deliver less than the previous version. It all gets rather disappointing as the initial emotion, passion or excitement soon withers and shrivels rather quickly as nothing gets delivered.
Blockchain is about structural change. It removes the centre of things. It brings with it a certainty of things that in most businesses need to be checked and confirmed on each side of the deal or transaction. Blockchain records activities (transactions) that exist in a Peer 2 Peer network only once, a protocol that sits on the Internet alongside WWW (WorldWideWeb). It is reliant upon and resides at the Internet layer. It was Http and HTML that unlocked the WWW as a new range of applications encouraged information sharing and eCommerce transactions took off.
Entire Industries immediately collapse and all middlemen are crushed and not needed. Within organizations, the admin and corporate centre disappear. The same result. Cost out, efficiency and transparency.
For this to happen Blockchain requires new apps (Dapps) to unlock the full potential of the technology as a game changer. It is a blank canvass for innovators and entrepreneurs to reinvent the past and deliver new kicks, excitement and fetishes to customers that increasing want to control their own value and feel that trust in business (banking and government) has been lost.
Blocks and Chain’s hidden depths
Blockchain is a modern metaphor for stirring things up a bit (a lot actually). It is neither one thing nor another yet it is a lot more than most people can cope with… At the core a distributed database technology that stores transactions as a ledger (an immutable record), a digital currency offering P2P connectivity as a ‘financial rail’ (without needing to be banked), a development environment and rich context languages to create new apps (new ways of doing stuff), a vast computing power (10,000 times bigger than the biggest 500 companies) and it is Open Source (free), unless you decided to buy a licensed version. It is deep and multi-layered.
Blockchain already provides new customer experiences through new Interfaces that allow people to trade their own value with new levels of assurance than ever before. Payments using Bitcoin happen without the middleman distort things, taking fees and diluting their value. It is free and money arrives in minutes not days. Imagine Remittance without fees for the non-banked. A simple mobile app (or wallet) is all it takes.
The business processes are tied to the application layer and new Dapps offer lots of new ways to solve business problems. Blockchain also plays nicely with other technologies such as Robotic Process Automation as software BoTs that can improve cycle time of the poorest business processes and enable new ground breaking ways an organization can do things that until now we never thought possible. Entire back office functions that used to have hundreds of staff now have a handful.
Smart Transactions as Smart Contracts
The business logic sits at the transaction layer, or what some are calling Smart Contracts, that aren’t contracts in the legal sense at all. A better definition is Smart Transactions where active software code can trigger and then enforce a wide array of actions and events. I have left the concept of autonomous agents for another day.
The place to store data, information and transaction records is within the chain of Blocks. A serial set of Blocks that contain information that is Time and Date Stamped and linked to the previous block, as an immutable starting point. A valuable starting point record, a ‘golden source’ that cannot be amended or changed, verified by the network, those appointed as custodians and provide consensus.
Things that determine your particular shade of Blockchain:1
– Blockchain Software – do you go Open Source or Licensed, which version and what is the TPS throughput, the underlying development language e.g. Ethereum’s smart contract language Solidity?
– Public or Private or both – who will have access and what kind of access is desirable?
– Governance – Permissions and how Consensus will be delivered. Who will be the NODES and who will be the custodians, Open Source community or elsewhere?
– Collaborations – who and why and the level of encryption?
– Resources and Education – where do these come from and are management understanding and engaged in the design of the new?
– What infrastructure exists, and what external infrastructure will be required, cloud, tools, testing, and development?
– Who will build the distributed apps, what are the business processes and the business logic to execute Smart Transactions as Contracts?
– What will the End User see and touch as Staff and Customer experiences?
– Access at P2P level e.g. wallet or mobile apps or alternate?
– How will the transfer of Value, Token, Digital Money work and who decides a good actor or bad?
– Which algorithms as Hashes, and will your Blockchain be Proof of Work or Proof of Stake?
– How to use the financial transportation layer using crypto-currency to flip into other currencies and values (commodities)
– Interoperability with the old universe where Blockchain Smart Contracts execute through ERP and other enterprise software, as the new world needs to communicate with the dinosaur world until extinction
– Side chains and Oracles (data sources) are essential to the architecture of Blockchain implementation, how are these side chains connected and who decides access (permission)
– Ramps and gateways to Payment platforms and other rails (temporary or hard wired API)
– Scale – how many Transactions Per Seconds are needed and how the tech scales notwithstanding the cloud plumbing as a Blockchain backbone
– Regulation and the Law will always be a decade behind new tech, but how to stay right side or whether to disregard depends on industry sector, geography, and platform
Was it good for you…
I like to get my monies worth from new tech. All organizations and C-level executives need a strategy for Blockchain, crypto-currencies, BoTs, AR, IoT and other pervasive technologies or miss out on the was it good for you moment, as this time it is happening quicker.
The serious people in the Blockchain community are beavering away building platforms and re-inventing everything. Like icebergs, it is all going on under the surface hidden from view. Much like the Houses of Pain and Pleasure in Acacia Avenue, you know it is there but need local knowledge to confirm where. Blockchain is exactly like this.
Blockchain is a serious dangerous technology in the sense of how it delivers Pain and Pleasure. It will turn industries on their heads, and for others, it has the potential to eliminate them completely. For most, they will witness a shift in the balance of power away from the large centre, the big corporates, the national agenda towards new consumption models that will bring more people as prosumers into the trade tent. Blockchain will take the brakes of commerce and include everyone that wants to play whether or not they have a bank account, as long as they have value to trade and can reach the Internet they can be a player in the game.
Choose carefully who you ask for help and you may get more pain than pleasure for your money. Welcome to the world of Blocks and Chains, of Bits and Coins of reducing friction and removing the unnecessary non-value add.
Want to play…?