Blockchain in Business
Technology has significantly evolved in various sections, and major sectors that benefit from technological evolution are the financial and retail sectors. Blockchain is a combination of various technologies in one system coordinated to maintain an endless growing list of ordered records. Blockchain are designed to be complex such that they could be used by anyone to write any digital currency and at the same time not under any centralized power/control and they do not accept alteration once recorded.
According to Nakamoto (2008), as quoted by Marvin Rob in his article on The Invisible Tech That Is Changing the World, Blockchain is said to be a database that combines different data structures like columns, rows or text to execute a command and uses the digital currencies. He finalizes by foreseeing Blockchain being employed in various aspects like in digital currencies, identity confirmation e.t.c.
Iansiti and Lakhani (2007), Number of transactions is recorded between two different parties in a correct manner that is very efficient. Its description is an open distributable ledger that can trigger transactions automatically when programmed. They further illustrate that, businesses can significantly benefit if they choose to use Blockchain as part of running their businesses due to;
- The establishment and verification of identities and chronicles are enhanced by Blockchain.
- It's possible to set organizational boundaries, assets, especially data related, and security.
Limitations of Block Chain Technology in Businesses
The author’s, Iansiti and Lakhani (2007), advise that block chain has also some of its limitations and any businesses investing in them should have precautions laid out to avoid running loses. Some of the limitations they mention include; technological barriers, governance, security threats by hackers, societal barriers and even internal organizational barriers.
According to Sforzin et al., the Blockchain are not yet mature enough to be used in industries and mentions some of the limitations as being; privacy is not enhanced due to Blockchain depending on the already existing transactions and order of executions. They also mention the decentralization of block chain governance is not in a democratic set up hence not applicable to many businesses.
Factors to Consider Before using Blockchain
According to Iansiti and Lakhani (2007), various factors should be laid in place to ensure that the adoption and use of block chains in businesses are not to be regretted. These factors include the following;
The use of transmission control/Internet protocol (TCP/IP) should be put in place to use the internet in connection with other software. The (TCP/IP) enables the establishment of messaging, robust data, voice and video connections which are secure and scaled up. The other benefits are it has allowed expansion of businesses that are internet driven and platform based i.e. Amazon online store.
The gradual process of adoption of the Blockchain using some criteria/framework is the next factor to consider. These structures are embedded in four stages;
- Single use of the Blockchain, like in emails. It's possible to use both online currency and TCP/IP at this juncture.
- Is the localization stage, is where high novelty innovations with a limited number of users are engaged in value creation.
- Substitution framework, it aims in the replacement of the fundamental sales processes.
- Transformation framework, it’s successful if the first three are successful. It overhauls the whole system in social, economic and political systems and the implications are fascinating.
Iansiti, M. and Lakhani, K. (2007). The Truth About Block Chain. Harvard Business Review.
Marvin, R. Block Chain:The Invisible Tech That Is Changing theWorld.
Nakamoto, S. (2008). Bitcoin: A Peer to Peer Electronic Cash System
Sforzin, A., Karame, G., Fedorov, S. and Li, W. Towards Scalable and Private Industrial Block chains