Many executives feel like blockchain is a hammer looking for a nail that doesn’t offer business value.
However, the real-world blockchain networks that have formed over the past few years are proving that blockchain can be valuable. Even the most pessimistic skeptics are starting to become convinced that enterprise blockchain can improve business processes.
In 2020, we’ll see innovative companies finding more opportunities to adopt blockchain for data sharing and payment processes. Here are some trends to watch for in the new year and some ways to prepare your organisation to keep up with the evolution:
Enterprises will adopt stable coins for payment processes
Stable coins — digital tokens that are valued equally to real-world assets — are set to provide the stability that has been lacking so far in crypto- and blockchain-based currency. Services like Monerium’s programmable digital money combined with existing platforms like Tradeshift’s demonstrate that blockchain-enabled smart contracts between enterprises are not only possible but are real and improving business processes. These kinds of services boost trust in every transaction and give organisations a more secure way to conduct business transactions that involve payments.
Using stable coins for financial transactions will provide CIOs and CFOs with lower-cost and more flexible options to both make and receive payments. The use of stable coins also provides enterprises with a way to begin using public blockchains. Most important, adoption will help executives better understand blockchain and enable them to identify opportunities where it can be a competitive advantage in other areas of the business.
Tokenisation use will expand
As we gain an understanding of how decentralised finance can impact business ecosystems, we’ll continue to see broader and deeper uses of tokens. The Token Taxonomy Initiative, a consortium of companies developing tokenisation standards, is evidence of this broad interest in tokenisation. The kind of diversity we’ve seen with tokens up to this point was useful in figuring out how blockchain-based tokens can be used. But now that it’s better understood, the TTI is creating standards that will allow for broader use — and potentially more interoperability between systems.
Innovative companies will leverage the ability to use tokens as a way of opening up markets to more investors by "tokenising" real-world assets like real estate. This will give smaller investors the ability to participate in areas where the overhead and business model may have prevented them from investing before. Executives in fields with the greatest potential for disruption such as real estate, equipment rental and leasing, and banking, need to understand the impact to their businesses and be creative in approaches to maintaining market share — or creating opportunities to be part of the disruption.
More consortiums will provide platform as a service solutions
Consortiums both large and small are forming to operate as platform-as-a-service solutions. With the global blockchain-as-a-service market expected to reach nearly $30.6 billion by 2024, executives have more choices than ever. For instance, Chainyard’s and IBM’s Trust Your Supplier provides base capabilities for supplier identity but is also a platform used to host other applications that expand on the base offering.
To decide which consortiums to join, it’s important to understand the strategic impacts of membership in each. Network security and data privacy should be guiding factors, as should the long-term governance of the networks. Governance will play a key role in determining whether the platform will attract the ecosystem that will produce long-term value. These are all vital to ensuring that consortium decisions will benefit all stakeholders as the network matures.
Consortiums will reward participation with tokens
Enterprise-focused consortiums have shied away from the use of tokens to incentivise participation. However, as enterprises are asked to participate in more consortiums in different ways, it will be important to recognise their contributions. Some consortiums are seeing the value in boosting participation by offering members tokens to incentivise joining and supporting the consortium’s activities. One example is the Microsoft and Intel-backed token-based reward system offered by the Enterprise Ethereum Alliance consortium.
This approach gives companies new ways of generating value by participating in a meaningful way in which incentives offset costs. This type of initiative will provide enterprises a way to reward stakeholders for their participation and ensure the long-term viability of the business network.
Enterprise blockchain platforms will take significant steps to be more interoperable
For blockchain to truly evolve, different enterprise platforms need to be able to integrate with each other. Interoperability is very important to adoption; last year, Accenture synchronised Digital Asset, R3 Corda, Hyperledger Fabric, and Quorum to enable business processes across all four distributed ledgers. Likewise, Fabric and Ethereum are now working more closely together with the goal of interoperability at the platform level.
As interoperability matures, the pace of adoption and innovation will accelerate. CIOs will have the opportunity — and the imperative — to think more thoroughly about where and how participation will help them strategically.
How to prepare for the disruption
As the more connected, more incentivised blockchain network landscape takes shape, it’s vital to prepare your organisation for the evolution. These three steps will lay the groundwork:
- Understand the fundamentals of blockchain: First, ensure that all executives and company leaders understand the fundamentals of blockchain technology and, more important, how it’s already disrupting traditional business. This may take time: According to a Global Blockchain Business Council survey, up to 63% of senior business executives lack even basic knowledge about blockchain technology
- Research consortium options: Forbes reports more than 60 consortia exist and that their members are among the world’s largest companies. With a basic understanding of blockchain technology, it will be easier to understand which ones would benefit your organisation most. Research them thoroughly to understand the long-term goal and value of each network and how you can participate in realising them
- Decide how you want to participate in any network: In addition to knowing how and where you want to invest, you’ll also need to know what role you want to play in each network in order to make better strategic decisions. For example, would you benefit more from being a node operator or simply a user? How you participate will be determined by your own goals as well as the governance model of any network you join
You can expect blockchain to be a much bigger presence in enterprise transactions in 2020. By understanding the biggest changes to come and adapting to them, you can position your organisation to be part of the evolution.
Interested in hearing industry leaders discuss subjects like this and sharing their use-cases? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo, Cyber Security & Cloud Expo and 5G Expo World Series with upcoming events in Silicon Valley, London and Amsterdam and explore the future of enterprise technology.