As we referenced in our ‘What to look out for in 2023’ blog earlier this year, ‘Blockchain’ is set to make it large in 2023.
Blockchain is a shared ledger or transactional record that cannot be edited by any party. It is designed to carry out transactions in a safe and secure way, and is most commonly known for use with cryptocurrency, such as Bitcoin, but it’s not restricted to financial services use.
The way in which a blockchain records information guarantees data or documents are secure, which offers significantly enhanced security when compared to other alternatives. As such, it is predicted that as of the end of 2022, 60% of Chief Information Officers have integrated blockchain into their infrastructure in some form.
There are several reasons for a business to start looking at blockchain solutions, these might include:
- Data that requires access by multiple parties for updating and viewing
- Requiring verification to gain access to data or information
- Time sensitive interactions
- Complexities added by intermediaries and third parties
- Transactions that need to interact with each other
When used in financial environments, security is vital, but blockchains offer other benefits too. The technology provides increased speed and cost efficiencies. With traditional transactions, there is ‘middleman’ which can slow down exchanges, with blockchain there is no middleman, plus all exchange documentation is stored in the blockchain so no document exchange takes place during a transaction, speeding up transaction times. It is also estimated that blockchain can reduce banks’ infrastructure costs by as much as 30%.
Blockchains provide ultimate transparency, and instant traceability, making it easier to see if organisations are carrying out transactions ethically, legally and fairly. They also benefit from high levels of automation, speeding up transactions and processes as the next step is automatically triggered.
The first step towards embracing blockchain technology is to research and understand which platform to start developing on. There are several out there, all with varying specialties, depending on business requirements. Some of the features to consider include:
- Scalability of the platform – will the platform fit with development plans now and in the future?
- Quality of information – is there enough information available to learn how to develop on the platform? Are the tutorials easy to follow?
- Adoption rate – how big is the community already on the platform? A larger community suggests the platform is easier to develop on.
- Development requirements – how much development experience do you need to work with the platform? Do staff skills match experience levels?
- What incentives are available? Some platforms offer incentives for reaching specific development milestones. Is this important to the project?
- Development tool availability – are there any tools to help learn and master the platform?
Once you’ve chosen your platform, you can then start tailoring the platform to your specific business requirements! If you would like to discuss any of this in more detail, please reach out to our experts.