Updated: Wednesday, May 3rd 2023, 10:56:51 am
Blockchain is an emerging, disruptive technology that is changing how industries like banking and financial institutions handle and safeguard transactions. With the rapid proliferation of digital transactions through mobile devices as well as e-commerce platforms. The dynamic changes in the business landscape and architecture coupled with an uptick in online frauds have pushed the adoption of the technologies like blockchain across numerous industries including fintech, healthcare, global shipping, and the real estate sector. Blockchain represents a paradigm shift in how corporations work and empower their customers. The technology provides enhanced protection and privacy, greater transaction transparency, decentralised operations, and a lower margin of errors.
Blockchain is a distributed ledger technology that is almost impossible to hack, change or cheat. It is a digital system that records transactions across an entire network of computer systems. Data is stored across thousands of servers globally and users are allowed to view all the entries on the network in real-time. In a blockchain, each block contains numerous transactions with a unique proof of work attached to it on top of proof of work from previous blocks. This creates a chain effect which makes any alterations extremely difficult. Each transaction recorded in the block has an immutable cryptographic signature called a hash. To corrupt a blockchain, hackers would have to change every block in the chain across multiple distributed systems.
During the 2008 financial crisis, public trust in traditional banking institutions dipped to an all-time low. Software and tech enthusiasts saw this as an opportunity to create alternate financial systems outside the purview of traditional financial systems. This ushered in the creation of Bitcoin, a cryptocurrency that operated on a peer-to-peer cash structure. Bitcoin functioned on cryptographic rules which included hash, time-stamping, consensus mechanisms, and asymmetric encryption. Since all transactions on the blockchain were time-stamped and sequentially chained in blocks to form digital ledgers, tempering with data became almost infeasible.
Blockchain technology has outgrown beyond the confines of cryptocurrency and today, it is replacing traditional computational and data storage infrastructure. Blockchains like Bitcoin and Ethereum are growing in popularity, as such, they are adding more blocks to the chain and thereby amplifying the security of the entire ledger. The technology is driving greater transparency across the entire digital ecosystem and accelerating digital transformation.
The technological evolution had enhanced data collection and ad targeting methodologies. Vast amounts of data are being mined through data collection technologies, enabling brands to easily track, collect, and analyze consumer data. With growing cybersecurity concerns, blockchain has the ability to alleviate consumer concerns regarding online transactions. Online shopping and e-commerce businesses rely heavily on internet banking. These businesses have access to the personal details of customers such as home addresses and credit card numbers. Protection of this sensitive information is a major factor that impacts customer trust and loyalty. The emergence of blockchain technology has enormous potential to ensure a high level of security for both brands and consumers. Blockchain can provide companies with greater visibility over customer profiles, touchpoints, purchase patterns, payment history, and promotion responses and enable them to craft more attractive, valuable, and customized loyalty programs and personalized recommendations. It has the power to enhance the entire marketing and sales funnel as well as create business value for organizations.
With blockchain technology, organisations can innovate their business models by removing intermediaries in the ecosystem and enhancing operational efficiency. Companies like Coca-Cola are deploying blockchain to create a secured registry for their global workforce to root out forced labor from their company. The secure registry allows the company to identify, employ and track workers who genuinely want to be part of the organization, thereby facilitating transparency in the hiring process and wage distribution.
The digitalization of payments and supply chains means that organizations are transforming legacy systems to become safer digital infrastructures. This would require upscaling the workforce with digital skills and deploying enterprise-wide automation. Real-time tracking of transactions ensures the security of all payments, minimizes delays, cuts extra expenses, and reduces employees’ failures in the entire supply chain. The use of blockchain technology in vulnerable sectors like healthcare and financial services is securing the data distribution and preventing exposure of critical data. Such preventive and proactive measures are crucial building blocks of consumer loyalty. The instant accessibility of data over the distributed network ensures that relevant departments have access to important customer data at all times and thereby are better able to solve customer-related issues or queries. Blockchain is fostering customer-centric innovation to support business growth and prosperity.
Business models are transforming at breakneck speed thanks to disruptive technologies like blockchain. Customer journeys are more complex than ever. These technologies are beneficial to organizations as they help them understand how to efficiently spur internal processes and capture new opportunities. The superior computational power of blockchain technology has the potential to revolutionize how companies handle and secure data on a large scale.