Blockchain: what do executives need to know?
With a current valuation of nearly £400million, and a projected valuation of £28billion by the year 2025, according to cryptocurrency news specialist NewsBTC, there’s no denying that the blockchain is big business.
Yet, whilst most might have heard of word, outside of specialist tech-savvy spheres, is blockchain understood – both for what it does and its business potential?
For one, most executives don’t appear to have a grasp of what the tech phenomenon is. A staggering 63% of execs claim to have no knowledge of what blockchain is, whilst a further 30% consider their knowledge unsatisfactory or incomplete.
However, a recent Cointelegraph survey on the utilisation of blockchain in business expect the technology to more than double during 2019 – despite executives at large firms not being committed to it.
So, what is blockchain?
Not much is known about the initial origins of the blockchain tech movement. It was invented in 2009 by either an individual or collective under the name of Satoshi Nakamoto along with an extensive whitepaper on blockchain’s most well-known digital cryptocurrency. Put simply, the it is a network which allows the transfer of information (such as currency) from one server to another. The best way to imagine blockchain’s simple complexity is essentially viewing it as a living, breathing hivemind of constantly updating information.
Do executives need to know about it?
“As blockchain continues to push itself to the forefront of technological innovation, it is vital that senior executives and business leaders fully understand the capabilities of this cutting-edge technology,” commented Nexus Director Alex El-Nemer.
“Whether it’s to drive visibility into spending, or to reduce fraudulent activity through improved processes, it is an important technology to understand and implement.”
“By equipping business leaders with adequate knowledge about blockchain, we are ensuring that our nation’s economy and business are headed by technologically capable leaders,” he continued.
Why do cryptocurrencies factor in?
A cryptocurrency pretty much does exactly what it says on the tin. Any amount of money can be transferred through a conversion tool to pay for goods and services. The information is encrypted before it arrives at its destination, meaning it’s almost impossible to track – hence the negative stigma it has received as the key currency behind the Darkweb and all of the less than reputable marketplaces therein.
The whole system acts like a stock market, with currencies constantly fluctuating in value based on how many people are investing in it. Key cryptocurrencies include Litecoin, Ethereum, Ripple, Zcash and Nakamoto’s creation – Bitcoin.
Despite many big businesses such as Mircosoft, dating site OKCupid, mobile gaming company Zynga and marketplace Etsy embracing the technology as a standardised payment method, the volatility of the cryptocurrency marketplace can’t be underestimated.
In fact, some key names in business believe that the format has a potentially devastating future for those relying on its long-term success. Speaking to CNBC in Davos, BCG Digital Ventures founder Jeff Schumacher commented: “I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything.”
Who’s using blockchain?
American Express – Tech-fueled investment banks were some of the first big corporate entities to embrace blockchain technology. Ranked number 119 on the Global 2000, American Express’ investment in blockchain spans everything from testing the viability of cryptocurrency to using blockchain to give vendors more power over membership rewards.
BHP Billion LTD – BHP is considered one of the largest key mining corporations in the world. The company is currently testing how effective the blockchain is when applied to the efficiency of its supply chain.Banco Bilbao Vizkaya Aregntaria – Ranked at 116 on the Global 200, the bank was an early investor in the cryptocurrency boom. It recently confirmed that a €75million deal was closed using both Ethereum and Hyperledger opensource blockchain technology.
Original Post by Kieran Howells, Executive Grapevine