Have you overheard any conversations like this lately, or been in any yourself?
“What’s a blockchain?”
“Well, it’s like a database, but it’s decentralized. And it kinda relates to this Bitcoin thing, sorta. And a lot of companies have raised money with something called an ICO, which is like an IPO, only different because it’s on a blockchain and you get a token instead of a stock certificate.”
“Huh?”
“Well, it’s hard to explain…”
We’ve been studying blockchains lately so we’ve heard a lot of these, and so with our sister company FutureLab we set about to help bring some clarity to this new technology that may (or may not) prove to be highly disruptive in the global market. Is it Blues or Bliss for the future of Blockchain? We’re not sure, but in case it is bliss, we want to help you get ready!
What’s A Blockchain?
Here’s a simple explanation:
A blockchain is a system of record-keeping (a database) in which data are stored digitally on many computers at the same time, instead of in one central place. So it’s decentralized.
All the computers storing a given blockchain run on a network, which may be publicly accessible to anyone, or private to a defined group.
Why bother with a blockchain?
A blockchain may be very useful whenever there’s a concern about data manipulation or corruption, because any change to any data stored in a blockchain format are immediately apparent to everyone who’s part of the network. This makes it difficult-to-impossible to alter the data. So ownership records, trade transactions, identity documents, health records, and contracts are five types of uses that seem very promising. And course a sixth is digital money, cryptocurrencies of which Bitcoin is one example.
Why bother with digital money?
Because it doesn’t depend on the government, it can be anonymous, and done correctly, no one can steal it. (Getting it right is proving to be more difficult than some people thought, though…)
Smart Contracts
What a blockchain does that interests a lot of people is that you can replicate on a blockchain the events and activities in the real world, so as events happen and you record them on a blockchain, you have a chronological record that can’t be altered. By linking the “real world” and the “digital world” together, you can create “smart contracts” that execute themselves digitally as events unfold in the real world. So trade agreement for global market that used to require thousands of documents and hundreds of hours to process can now be done in near real time, saving tons of money for everyone. This is the premise behind the IBM-Maersk joint venture that’s gotten a lot of press lately.
In principle it’s nearly that simple. But in practice it requires massive doses of advanced math and game theory to make a blockchain work, so it’s taking time to work out the technology. But slowly the necessary infrastructure is coming into place, and the block-optimists figure that within a few years we’ll all be using blockchains just like we’re using our smart phones today – without really noticing the technology at all.
The block-pessimists feel that the uncertainty around the disruptive potential of blockchains relates to how different blockchains are from computing techniques we’ve been used to for so long. It’s a very different way of managing data, and so the full potential is entirely unclear at present. While many believe that the potential is enormous (the bliss), others are skeptical (the blues), or just opposed. And quite a few people seem to be all mixed up about it.
J.P.Morgan Chase CEO Jamie Dimon, for example, is famous for taking multiple and contradictory positions. At one point recently he called cryptocurrency a “fraud,” but then later said he “regretted” making that comment. Then he said he would fire any employee who was trading in Bitcoin, and then he said “blockchain is real.” He’ll have to make up his mind soon …
Given his job leading one of the world’s largest banks he probably ought to know, and maybe by now he’s got it all sorted out. But in case he needs help, we’re here for him, and for you, too.
Blockchain Workshops
During the last few months we’ve developed a book and four workbooks, all intended to help people understand the blockchain phenomenon, and to begin sorting out how it pertains to their own companies.
Our Blockchain Workshops use the Agile format to help you think through your blockchain business model in about half a day. We’ve prepared a generic version of our workbook for use in any industry, and also versions specifically for Heath Care and Financial Services.
Blockchain Business Models and Simulation
We’ve also created a Blockchain Business Model Workshop to help people who don’t yet understand blockchains, but need to or want to. This workshop includes our Blockchain Simulation Game, designed to help novices grasp what it’s all about in a hands-on, experiential format that teaches the essence of blockchain in about an hour.
(By the way, our sister company FutureLab is also developing blockchain applications as a technology consulting partner in a number of different application areas, including health care, innovation management, cryptocurrency, and smart cities.)
Blockchain City Book
Our newest book is Blockchain City: Community, Technology, and Meaning. It’s still in review mode because we keep finding cool new things to add to it, but it’s done enough that you can get one at Amazon if you’re interested.
We’ve been consulting for a forward-thinking real estate firm that owns millions of acres of land, and we all wanted to develop a better understanding of how blockchains might transform cities, and what that might mean for developers.
We quickly realized that while the whole “smart city” movement may become important one day, most of the attention has been driven by technology developers that are promoting the smart city idea because it’s a big market, and so it sells hardware and software. We felt it was important to examine the social implications, which explains the subtitle of the book, Community, Technology, and Meaning.
And we certainly did find lots of social and economic implications across many dimensions of urban life, including human interaction, neighborliness, and environmental sustainability, as well as the more obvious links in transportation, business development, public records, and finance.
Once we completed the main body of the book we then went back through and identified the 60 biggest ideas, so we turned a summary of those ideas into the first chapter of the book, and then flagged where the ideas are more fully developed throughout the main text so you can read the summary, the topics of interest, or the entire book.
Since the first draft was done we’ve continued to think about it, and four additional themes have come up, which will be added into the next iteration.
We welcome your suggestions concerning additional ideas and topics that should be included in the book. Please email them to us for inclusion.
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