Blockchain Introduction
Blockchain drives Digitisation 2.0 forward
The next wave of digitisation is coming, bringing a new dimension of automation with it. Blockchain technology is playing a crucial role – it is high time to concern yourself with it.
Text: Urs Binder, Picture: © Keystone,
Blockchain technology is more than just hype, and it is does more than just form the basis for cryptocurrencies like Bitcoin: The further the technology develops, the more it is becoming the driver of the next wave of digitisation. And this wave is rolling towards us unabated – business models and interactions between people, objects and organisations are about to face radical changes.
New opportunities, new security
Blockchain technology has reached a level of maturity that is opening up new opportunities. Four main features play a role here:
- Decentralisation: A blockchain provides a common and consistent view of distributed data and transactions. The geographical distribution of the nodes that make up the blockchain is not an obstacle.
- Disintermediation: Unlike conventional transaction models with a central trustworthy control institution, trust is created directly in the infrastructure – there is less or no need for intermediaries.
- Monetisation: Every type of asset can be monetised with a blockchain. Cryptocurrencies support this.
- Smart contracts: Program logic stored in the blockchain enables interactions that operate according to defined rules. As part of the blockchain, smart contracts are protected against impermissible manipulation.
In a blockchain, a unique identity can be assigned to any kind of
asset – whether it is a physical object such as a diamond, a digital asset such as a music file or an intangible good such as one kilowatt hour of electricity. The asset is represented in the cryptographic world of the blockchain in the form of what is referred to as a token. The blockchain irrefutably guarantees that the token exists at a certain time (time stamp), certifies the origin of the token verifiably (proof of authenticity) and indisputably defines who owns the asset and thus has the right to transfer it to another party (trade).
Added value in the network
The blockchain technology provides the greatest added value in the form of an ecosystem whose success is based on the number of participants and the resulting network effects. Participants can participate in various roles – such as sellers, buyers, and providers of functionality – and exchange a variety of assets. All market players have the same view of the information and can fully verify the history. Contracts are directly anchored in the digital code as smart contracts. In this way interactions can be automated and disputes can be largely avoided by means of automatic consensus algorithms. This open, flexible construct allows two major evolutionary steps towards “Digitisation 2.0”:
- Barriers are disappearing: Participants in the ecosystem can interact much more easily. Transaction costs and all kinds of frictional losses in general are being reduced.
- Network effects are emerging: in such an ecosystem, it is easy to integrate additional companies that offer value in the form of assets or functions.
How do you profit?
How do you earn money in such an ecosystem, and how do you avoid being displaced by new market players? There are no simple answers to these questions, but one thing is definitely essential: Decision-makers need to now identify the impact of blockchain technology and its potential benefit for new business models in order to prepare and act accordingly. The innovation cycles are getting shorter and shorter regardless of the industry – and suddenly it is too late because others have already seized the opportunity and occupied the new market opportunities.
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