According to a recent article by Don Tapscott, published in the Harvard Business Review, the technology most likely to change the next decade of business is not the social web, big data, the cloud, robotics, or even artificial intelligence. It’s blockchain, the technology behind digital currencies like Bitcoin.
The article presents an excellent overview of emerging blockchain technology and its likely impact across a range of industries.
While blockchain technology is complex, the basic idea is simple - 'a vast, global distributed ledger or database running on millions of devices and open to anyone, where information and anything else of value (money, titles, deeds, music, art, scientific discoveries, intellectual property, election votes etc) can be stored securely and privately.'
On the blockchain, trust is established, not by powerful intermediaries like banks, governments and technology companies, but through mass collaboration and clever code. Blockchains ensure integrity and trust between strangers. They make it difficult to cheat the system.
While much of the current hype around blockchain focuses on the potential to fundamentally change the financial services industry, based on a two-year research project, Don argues that it will have a much wider and more profound effect, transforming business, government, and society. Blockchain technology can take networked business models to a new level, supporting a whole host of breakthrough applications supporting enterprise collaboration and creating a better sharing economy.
'In the mid-1990s, smart managers worked hard to understand the Internet and how it would affect their businesses. Today, blockchain technology is ushering in the second generation of the Internet, and if companies don’t want to get left behind, they’ll need to dodge the innovator’s dilemma and disrupt from within.'
You can access the full article here.
In a related video interview, with transcript, on the McKinsey website, Don explains why blockchains have the potential to revolutionise the world economy.
A second interview with his coauthor and son Alex Tapscott can be found here - What you need to know about blockchain technology.
For a brief overview of how two completely different industries are beginning to use blockchain please see 'Why Airbnb and other travel brands are interested in blockchain technology' and 'The latest customers for the technology behind bitcoin are Nato and the US military'.
You may find the following video from Futures Lab to be useful in explaining the basics.
A useful overview of how blockchain works in financial services can be found here.
As always, comment and feedback are very welcome.