Listen to Don Tapscott, a leading thinker on how technology impacts business, discuss the business problems that blockchain can solve.
Want to hear more from Don?
Enroll in his Blockchain and Business: Applications and Implications course, which is part of the Blockchain Revolution for the Enterprise Specialization.
What is blockchain?
Blockchain began as the underlying technology behind cryptocurrencies like Bitcoin, but it’s now become a generalized technology that we think of as the internet of value.
For 40 years, we’ve had an internet of information. Now with blockchain, we have an internet of value—where anything from money, stocks, intellectual property, designs, the data in our identities, even cultural assets like art or music or votes—can be managed or transacted in a secure and private way and where trust is achieved by cryptography, collaboration and some clever code.
Just like the internet before it, blockchain as the internet of value holds vast promise to transform our businesses and to disrupt entire industries. Because now, we have a new operating system for the 21st-century corporation.
Talent, assets, and capability can be outside of corporations, leading us to very profound changes in business models—and then the deep structure and architecture of the firm. Entire industries are being changed by blockchain as we have a technology that enables peers to come together and collaborate in exciting, new ways.
What real-world business problems can blockchain solve?
Blockchain can solve many real-world problems across many industries, and we’re studying 14 of them at the Blockchain Research Institute.
In financial services, it speeds up the metabolism. Think about when you tap your card in a Starbucks and messages go through six companies, and three days later, clearing or settlement occurs.
Well, if all of that were based on blockchain on a distributed ledger, there would be no three-day settlement period because the payment and the settlement would be the same activity. There would be no counterparty risk or no cost or no delay. And that’s one of dozens and dozens of opportunities in that industry.
Think about remittances, a trillion-dollar industry, where people who’ve left their ancestral lands send money back home to their families, the global diaspora. This shouldn’t take four to seven days and cost a housekeeper 10 to 20%. It should happen instantly and cost almost nothing, and blockchain can handle that.
Blockchain can solve the problem of land titles in the world, where 70% of land titles in the developing world are not enforceable. Blockchain can help us create a more open and transparent platform for government and help end to corruption.
And in business, of course, every industry is up for transformation. Just think about supply chains, a $50-trillion industry. All of that is moving towards a blockchain platform. So, this is 1995. Only this time, it’s bigger than the internet of information. This is the internet of value.
What are the most exciting business applications of blockchain?
When it comes to business, one of the biggest themes has to do with identity and that relates to data.
The virtual you—all this data that is a mirror image of you—is not owned by you. And in some cases, it knows more about you than you do. Because you don’t remember where you were a year ago or what you said, or what you bought, or what score you got on a test, or what medication you took, or what your heart rate was. Get the picture.
The trouble is you create this data. But it’s captured by the new digital landlords, large technology companies, some financial companies, governments, and so on. And it means that you can’t use this data to plan your life. You can’t monetize the data.
And this has created a bifurcation of wealth in society as data is the new asset class owned by a tiny handful. And it means that your privacy is undermined and people say, well, privacy is dead. Get over. They’re making a big mistake.
Privacy is the foundation of freedom. We can get our identities back through blockchain, a self-sovereign identity that sweeps up all this data as you go throughout life. And the data that you create is owned by you and used for you.