Can my business specifically benefit from blockchain technology?
After my article last month on TTG, I received a few queries asking me how “Bitcoin” could help in people’s business. At first I was a little confused as to why I was receiving queries about a subject I didn’t even mention in my article, but after engaging with my enquirers, I realised that a number of people still hold to the misconception that “Bitcoin” and “blockchain” are synonymous.
I remembered an article that Forbes published in 2018 outlining the number 1 misconception with blockchain is this very misunderstanding I was being enquired over: That Bitcoin equals blockchain.
The truth is: Bitcoin doesn’t equal blockchain. Saying that the two are synonymous would be like saying “spreadsheets” are synonymous with “gold”. While spreadsheets help in the accounting of gold, the two are entirely different entities. Apply that to our scenario; and think of blockchain as the spreadsheet, and gold as Bitcoin. It’s a very easy and helpful parallel. Blockchain is the type of spreadsheet that keeps Bitcoin’s record. And in the same way that a spreadsheet can be used to account for absolutely anything you can imagine, blockchain can be applied to just about the same: anything.
So, while I am a believer in Bitcoin itself (which is a conversation for a few beers at the pub, I guess), when I refer to “blockchain” I am not referring to “Bitcoin”, I am referring to the technology that was invented in order to make Bitcoin work. And when that technology was invented, the creators accidentally (or perhaps purposefully) created a new technological framework for truly global businesses to operate in.
So, can blockchain really help my business?
So now that we’ve dealt with that misconception, allow me to answer the heart of those questions in this article: Can blockchain really help your business?
Well, there are two dimensions to answering that question: The first being the size of your business. The second being the area, division or industry that your business operates in. In this article, we will deal with the first dimension of that question, and then tackle the second dimension in an entire eBook that we are excited to bring you at Tomorrow Today Global within the next two weeks.
The size of my business in relation to my digital needs
“Why does the size of my business matter when exploring a blockchain solution?”
Well, that’s because blockchain technology is still fairly expensive to implement. Due to it being a specialized niche within the IT industry, there aren’t a lot of companies offering the tech, and thus those that do are able to charge a lot more for it. Especially the ones worth trusting. (In fact, here is a side note tip: It would be cheaper for you to employ a junior computer engineer with an interest in encryption, cryptography or blockchain and allocate their salary to R&D as they work on proof of concept solutions, than it would be to develop a bespoke solution through a consulting firm. But that’s also a discussion for another day).
Small to medium-small businesses: Big budget needed
So herewith you should begin to see why this first dimension is important for your business to assess how much it needs blockchain: It’s an expensive undertaking. And most small to medium businesses don’t have the kind of budget required to implement this early-stage technology. As with all business: It comes down to 1) “how much of a need is the solution” versus 2) “the cost of implementing it”. If the need is greater than the implementation cost, then you need to make the investment. But if the cost is greater than the need, most small to medium businesses can get away without the technology until it becomes more widely available.
And it won’t be long until it is more widely available. With IBM, SAP, and Microsoft all working on enterprise blockchain solutions, we will see more cost-effective products on the market within the next 5 years or so, but until then, the “need verse cost” scenario is going to be the big debate in small to medium business boardrooms. I would advise SMEs that are looking at blockchain to consult with a local computer engineering consultancy in tackling this debate, in order to get an expert opinion on your specific need.
Now onto larger corporates, who have hefty IT or even R&D budgets. If your company is able to allocate at least $200,000* to a year’s worth of IT implementation costs, and would like to use those funds to both improve your operation from a cost-cutting/efficiency point of view and from a cybersecurity point of view, then certainly, I would indeed recommend exploring blockchain.
Granted, an additional $200,000+ can be quite a bump off the bottomline, but the benefits can be enormous. Besides the cost-cutting, efficiency and cybersecurity benefits, the marketing and PR spin in our current tech climate can be worth its weight in marketing budget gold. Just throw in “AI” along with your new blockchain development into your communications and the local journalists will be dubbing you the next “Apple”! And while I say this in jest, unfortunately it comes with a hint of reality. As a journalist I know all about hyped technologies. And yes, while there is no doubt that blockchain (and AI) are extremely hyped technologies, don’t “swing the pendulum the other way” and reject the vast technological solutions that they provide.
Areas where blockchain could help you
So now that you’ve stomached the budget requirements of the technology, the next step is to ask yourself whether blockchain really will improve your company’s operation. In my five years (since 2014) of writing about blockchain, I have identified twelve main areas that the technology can directly assist a company or project in becoming more efficient. They are as follows:
1. Democratic voting systems
2. Supply chain efficiency
3. Cross-border value settlement
4. Asset & document registries
5. Asset fractional ownership
6. Loyalty reward programs
7. User Identity
8. Company/Project Fundraising
9. Legal & contractual implementation
10. Insurance security & fidelity
11. User-controlled media content (through democratic consensus)
12. Contracted international labour payment
If a large part of your company’s operation is reliant on any one of the above areas, and you can afford the budget required as discussed above, then I would certainly recommend you at least begin talks with some dev engineering consultants about how the technology could assist.
What if you’re a small to medium business who directly relies on one of those areas? Well, then I would suggest you get consulting, get some quotes, and raise the capital required to implement the technology.
There are two hard and fast realities for blockchain technology at the moment: 1) It is expensive to build. 2) It offers unique, never-before available solutions. Again, if your company can afford the financial overhead required to implement the tech, then I would encourage you to do so. Never before in cloud computing or even artificial intelligence have we been able to provide some of the solutions that blockchain can offer, and if your successful company truly is to become a company of tomorrow, today: Then it should be investigating the opportunities this exciting tech can offer.
In the next article, we will bring you an exclusive free eBook that unpacks those twelve areas where blockchain tech can help your business!
Until then, prepare for tomorrow, today.
*$200,000 over a year is a very broad estimate, and is entirely dependent on your company’s needs. It could be less, it could be well more. Blockchain development is very bespoke and feature-dependent, and thus costs are difficult to estimate.
Today’s comments question: What percentage of your company’s overall budget goes to R&D, and do you think it is enough?
James is an accomplished tech writer and speaker, and is Managing Editor at SA Crypto, South Africa’s first news website for the blockchain industry. He has covered innovative tech and how it can make our world a better place since 2006, and has since won five SA Blog Awards. His work has been featured on East Coast Radio, BBC Africa, and BizNews.com among others. His work in socio-economic philosophy caused him to stumble across the Bitcoin project in early 2013, where he began researching how true digital money and its underlying blockchain technology could impact society. His talks are highly engaging, very informative, and deeply inspiring. You can contact him on firstname.lastname@example.org – or on his LinkedIn profile here: https://www.linkedin.com/in/jamesprestonza/