Demystifying Blockchain for B2Bs
Dianna Albanese, SourceMedia
While we hear words like cryptocurrency, Bitcoin and blockchain tossed around, many people still have no idea what they mean and how they impact individuals and their businesses, although they should — by now, it’s touched many different aspects of information technology and AI across industries. What’s a blockchain, and why should business professionals in different communities care?
According to Forbes, a blockchain is “an append-only transaction ledger. What that means is that the ledger can be written onto with new information, but the previous information, stored in blocks, cannot be edited, adjusted or changed.” The concept was first brought to the surface by Satoshi Nakamoto in 2008, and then implemented in 2009 as part of the bitcoin currency.
Medium states that the core idea with blockchain is “placing your trust not in a single entity like a government, a bank, or a multinational company rather in the network.” Medium explored the different benefits of a decentralized system:
- Users are in control. Users can keep control of all their information and transactions.
- Decentralized systems are usually free of trouble. Decentralized systems rely on many separate components, so they are less likely to fail accidentally. They’re also attack-resistant, being that they are more expensive to attack, destroy or manipulate; the same applies to scams and third-party risks.
- Transactions are easier. Blockchain transactions can reduce transaction times and lower transaction costs, increasing transaction rates.
- Decentralized systems are transparent and authentic. Changes to blockchains are viewable by all parties and transactions cannot be altered or deleted. Also, blockchain data in these systems are “complete, consistent, timely, accurate and widely available."
Now that we understand what a blockchain is and its value, how can B2B organizations in different industries benefit from this type of technology?
The banking industry could see services like payments, loans, credits and trades become obsolete, according to CB Insights. They suggest that the facilitation of faster payments at lower fees, the removal of gatekeepers for loans and credits and the replacement of “paper-heavy bills of lading process in the trade finance industry” makes blockchain look all the more appealing.
In fact, investment bank and financial services giant J.P. Morgan recently announced its involvement in the newer technology: it became the first U.S. bank to “create and successfully test a digital coin representing a fiat currency” called the JPM Coin, based on blockchain technology which enables instant transfer of payments between accounts. Should more banks be following J.P. Morgan’s lead and embracing blockchain?
Healthcare IT is another industry that is undergoing changes due to the rise of blockchain. The Journal of mHealth lists the following as a few benefits of introducing a decentralized system to the community:
- The storage of medicine-related data has become more secure.
- There are improvements to the medicine manufacturing process and control (The Journal of MHealth cites “recording and storing the parameters and delivering and auditable trail of production and shipment with automated decisions”).
- Temperature control information can be tracked throughout an entire supply chain with loggers transmitting temperature history to a blockchain (this is vital for pharmaceutical products).
- The blockchain is also being used for “file transfers in clinical trials, patients data and pharmaceutical history storage, creation and maintenance of the blockchain network with patients, physicians and payers,” according to the same source.
An example of this is Medicalchain, a blockchain technology used to securely store health records and maintain a “single version of the truth.” Doctors, hospitals, laboratories, pharmacists and health insurers can all request permission to access patient records and record transactions. They also just launched MyClinic.com, a site that allows you to schedule a video conference with your doctor from the comfort of your own home.
Blockchain has provided and will continue to provide healthcare institutions, from pharmaceutical companies to hospitals, technologically-advanced alternatives to quickly solve problems and automate systems. The same goes for insurance organizations. Blockchain has the potential to improve operating procedures and customer experience by automating different systems within insurance companies. In a Deloitte study, researchers identified six use cases for blockchain in health and life insurance companies. The six cases were:
- Moving toward interoperable, comprehensive health records by adding security and the ability to establish trust between entities.
- Supporting administrative and strategic imperatives with smart contracts by automatically collecting records of information and acting on the data.
- Detecting fraud more effectively through the use of smart contracts.
- Improving provider directory accuracy to update listings more quickly and easily.
- Simplifying the application process by making it more client-centric — clients will have an easier time accessing medical records and information.
- Facilitating a dynamic insurer/client relationship which can help with the integration of wellness-related behaviors into said relationship.
Last month, Accenture and Generali Employee Benefits announced a first-of-its-kind blockchain solution for the employee benefits industry that allows participants in the reinsurance process for captive or pooling services to access the same data and reduces processing errors through smart contracts and automated reconciliation. In the announcement, Sergio Di Caro, GEB’s Chief Executive Officer, noted that, “This prototype represents a step forward for the GEB and for the insurance industry. The use of blockchain technology allow for a truly connected ecosystem and a seamless partnership between clients, advisers, local insurers and Generali.” We may see more of the integration of blockchain in the insurance industry in the near future.
Accounting is another area in which blockchain can improve services because of the relevance of the technology. According to the ICAEW, “Blockchain has the potential to enhance the accounting profession by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets.” With tedious bookkeeping out of the way, accounting professionals can focus on planning and the clients’ needs without having to worry about accuracy, transparency or availability of resources.
Blockchain is so important to the accounting community that organizations like the Accounting Blockchain Coalition (ABC) have been created to educate other businesses and organizations on accounting matters relevant to digital assets and distributed ledger technology (including blockchain).
Blockchain is still relatively new. The Balance states, “At this point, the technology is probably ahead of regulations, and it’s not always clear what to expect in terms of protection, privacy, potential risks and dispute resolution.” Be sure to do your research before diving head-first into this type of technology in any industry.
One State Street Plaza
New York, NY 10004
Follow Us For Updates
All audience and traffic data based on company reports and estimates as of Q1 2016.© 2017 SourceMedia LLC. All rights reserved. SourceMedia is an Observer Capital company. Use, duplication, or sale of this service, or data contained herein, is strictly prohibited.