By Bhushan Patil, SVP EMEA, Tech Mahindra
COVID-19 has driven businesses across the globe to adopt new and innovative digital solutions in order to overcome the challenges created by it. As we get to grips with the ‘new normal’, organisations everywhere are turning to these technologies to keep pace with an increasingly digital world. It is crucial for businesses to recognise the potential that emerging technologies such as blockchain have, in adding value to digital transformation initiatives.
As data security gains increasing significance in driving digital growth, blockchain, or Distributed Ledger Technology (DLT) solutions, can play a significant role. Blockchain’s value is rooted in its ability to instantly share data in a secure and safe manner. It is a ledger of transactions that have unique characteristics that are almost impossible to be replicated for fraudulent activities. This enables security-rich data sharing at all levels of a business across multiple industries and use cases. By 2022, worldwide spending on blockchain solutions is predicted to reach $11.7 billion, with the market estimated to accumulate $20 billion in revenue by 2024. So, exactly how will blockchain solutions accelerate digital transformation?The
Pace of Blockchain Technology
The blockchain is a decentralised digital system of record whereby untrusted parties can share a digital history and reach a consensus without a third party. It is a time-stamped series of unchangeable records of data managed by a cluster of computers that are not owned by any single entity. Every node or participant in a blockchain network is preselected and validated and they are bound to one another using cryptography. As such, a blockchain is resistant to modification of the data, making it incredibly secure.
While the first, and indeed the most famous, application of blockchain technology is bitcoin, a common misconception is that blockchains are only useful for powering cryptocurrencies. In fact, there are many other applications for blockchain in a commercial context, including supply chain and logistics monitoring, optimising real-time IoT operating systems, and implementing personal identity security, to name just a few.
Blockchains can be either public or private. Cryptocurrencies, for example, rely on a “public permissionless” network, where all parties have equal rights to transaction creation and validation, as well as the ability to produce new blocks. “Private permissioned” blockchain networks, however, are most relevant for enterprise applications due to the importance of corporate confidentiality. Because blockchain can provide a permanent record of data, this in turn, offers traceability across all stages of a business process. This also creates total transparency for processes like sourcing materials.
Unlocking New Value
Individual traders have famously led the way with blockchain by trading with crypto. But in terms of industrial applications, financial institutions have led the charge when it comes to blockchain adoption. In fact, 77% of the global financial sector adopted blockchain-enabled services as a part of their system and processes as of 2020. One use for blockchain technology in this sector is transforming legacy payments systems. Bitcoin and other blockchain currencies act not only as digital money but also as a method for remittances. Already, many companies have started to facilitate international payments in this way, as it allows them to avoid the high fees and slow processing times associated with traditional remittance payments.
Although banks and other financial institutions were at the forefront, every industry could benefit from adopting DLT. Blockchain has many applications in industries like healthcare. Tech Mahindra recently partnered with StaTwig to manage the traceability of the global COVID-19 vaccine supply using blockchain technology. Besides enhancing transparency across the supply chain, the VaccineLedger solution also aims to prevent issues such as expired vaccines being mistakenly distributed and used. Further, having access to immutable data blocks can help health institutions address the issue of counterfeiting. By introducing blockchain technology, businesses can trace the complete journey of vaccinations from sourcing to the hospital floor and prevent potentially dangerous incidents.
Working with a leading UK telecom operator, Tech Mahindra is using blockchain technology to develop frictionless trading platforms for sovereign to sovereign data sharing that will address increased complexity in customs processes introduced by Brexit. The platform will not only reduce the cost and processing time but also bring increased visibility and transparency to the trading transactions involving multiple stakeholders. Blockchain technology can also be useful in other sectors like manufacturing. Independently, blockchain-powered solutions can create complete transparency within the supply chain through the permanent record of data stored in “blocks”. The “blocks” in blockchain contain records such as details of transactions and a unique identifier that allows us to tell it apart from other blocks. Increasingly, manufacturers are also recognising its potential in combination with other emerging technologies like AI. AI technology can analyse the wealth of data generated from blockchain in real-time, and as a result, can generate end-to-end insights across the entire supply chain process.
The Future of Blockchain
Blockchain technology is expected to transform processes across all industries because of the secure data sharing it enables and its ability to offer complete traceability. For businesses across the globe, blockchain technology is no longer a digital solution of the future. Many industries like healthcare and manufacturing are already implementing blockchain solutions to solve problems old and new, and this shows no sign of slowing down.
For businesses that adopt blockchain technology, an improvement to legacy systems and processes and a whole new world of transparency and efficiency will be theirs for the taking.