The concept of blockchain technology is all but synonymous with cryptocurrency. It’s through pioneers such as bitcoin that everyday consumers have come to recognise this revolutionary and instantaneous mechanism for executing and recording financial transactions.

But in business, curiosity is turning into innovation and experimentation.

The use of blockchain to complete financial transactions is one of the more rudimentary applications of this technology. Blockchain means we now have a way to handle information without relying on a single trusted ledger, such as banks in the context of cryptocurrencies.

Across all industries, how we verify, audit, enter, record, and update data has been left to a patchwork of different technologies and mediums owned and monitored by companies and institutions.

These could be anything from spreadsheets, ledgers, books to computer software. For businesses, this can make dealing with other companies difficult, especially when they’re overseas, because there’s usually no way to verify or trust the information they provide. At best, a third party will be relied upon at great cost.

Cryptocurrency has been a proof of concept on the path towards revolutionising the type of record-keeping that underpins all businesses. By relying on a decentralised digital ledger for domestic and cross-border transactions, there will be greater trust between parties, less verification required by government or legal entities, and reduced costs.

Blockchain could mark the beginning of a new era of globalisation as the movement of capital, assets and people becomes faster and cheaper. In an age where it’s crucial to know where products come from — for reasons of biosecurity, financial security, anti-terrorism, or authenticity — new businesses will be able to enter global supply chains simply because it’s cheaper to verify information and easier to detect false information.

Blockchain technology could bring great benefits to the global labour market. When it’s imperative to prove a person’s skills and qualifications, relocating talent around the world for work can be hard for companies. Blockchain could make it easier to verify information on skills, licensing, or training at relatively low cost.

But this isn’t just about record keeping, tracking contracts and payments, and verifying information; even bigger opportunities could be realised by companies who work out how to exploit the efficiencies of blockchain to handle the information processing and information input aspects of their business. The emergence of blockchain could be like the movement online many years ago. The internet enabled businesses to move back-office processes and customer interactions online to achieve greater efficiency.

Blockchain could be the next evolution.

New ways of financing businesses and start-ups could be developed through blockchain technology. As an alternative to traditional equity shares, new businesses could create and issue the currency with which customers will purchase or use things, much like utility tokens. An example of this could be the ability to trade in computer memory.

There’s even opportunity to develop corporate governance models which make decision-making in large companies more democratic.

Blockchain could bring an infrastructural technology for how companies handle and process data, invoice, pay suppliers, interact with consumers and operate more efficiently, globally.

Jason Potts is a professor of economics at RMIT University and director of the Blockchain Innovation Hub at RMIT University.

 


 

Images from Ignite Outsourcing

Author: JASON POTTS

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