It’s safe to say 2018 is the year of the blockchain with more and more major companies like Humana and UnitedHealth announcing their entrance into this form of digital ledger technology. Companies know transparency is what their consumers demand, and they also hope to find efficiencies along the way.
But there is a wide gulf between hearing about blockchain and actually implementing it. Firstly, you have to answer two basic questions:
- What is blockchain?
- How could it help my business?
Just because something is trending, that doesn’t mean it will be completely right for your business. There may not be great enough demand or a willing partner, so start there. If you do, there are some things you’ll need to keep in mind.
Business Considerations for How to Use Blockchain
Blockchain interfaces will differ from chain to chain. Some companies will want to develop their own in conjunction with their chain partners. Others will use an existing platform.
In simple terms, a blockchain is like a Google Doc that allows anyone on the chain to edit but no one on the chain to duplicate. The blockchain ledger keeps record of all transactions and sends the information as encrypted data across a peer-to-peer network.
This has numerous business advantages: it allows for transparency, helps you track shipments, keep up with outstanding balances. You name it. But it’s only effective if you have two things in place:
- A need that could benefit from transparency and/or save on administrative costs
- A partner or partners who are willing to conduct business on the blockchain
Without either of those two elements in place, it can be pretty underwhelming.
Blockchain has the potential to be extremely disruptive. It forces participants out from the shadows with a technological system very difficult to hack. One would have to gain control of more than 50 percent of the computers on the peer-to-peer network running the chain in order to verify sinister changes. That’s because each addition must go through a digital authentication process before being verified to the ledger.
However, that does not mean it’s impossible. Also, legal questions surround purpose, implementation, and compliance.
If you believe your business could benefit from blockchain and you have willing partners but you aren’t sure what the next steps should be, John Teakell can help.
Teakell has decades of experience in legal defense, and his background also includes service as the Senior Trial Counsel for the U.S. Securities and Exchange Commission. While there, he prosecuted civil enforcement actions of fraudulent schemes in white collar cases.
He is equipped to answer your blockchain-related questions and eager to do so. Contact him today.