Overview: Blockchain technology may revolutionize businesses and give birth to new industries. Like the internet once was, it’s difficult to understand, but it may become ubiquitous in the future. Visionary leaders comfortable with change may reap immense benefits from this technology. Leadership coaching encourages leaders to welcome change and develop forward-looking attitudes.
Blockchain is a relatively new technology. Although it forms the basis of digital currencies like bitcoin, it’s not the equivalent of cryptocurrencies. Rather, it’s part of the technology that makes them work. When combined with cryptography, blockchain solves the double spending problem of all digital data. We now have bits of virtual information as genuinely unique as the $20 bills in our pockets.
Our ability to endlessly and perfectly copy virtual data gives digital technology its edge. This feature has made countless potential applications impossible through the best technology we currently have. Blockchain solves that problem and eliminates that hurdle. Thus, its potential is immense. It may become ubiquitous in the future, and no forward-facing organization can afford to ignore it.
How Does Blockchain Work?
A blockchain is a ledger that resides on a computer network. To write into the ledger, entities must compete to solve mathematical problems. The network determines the rules of the ledger and its maintenance by consensus. No single entity controls the ledger, and no single entity can change the rules governing the network.
Distributed ledgers like the one bitcoin uses are:
- Consensus governed
- Cryptography secured
How Can Blockchain Technology Benefit Businesses?
The hype that ensued after blockchain technology went mainstream may have died down, but the potential is still there. From the perspective of leadership coaching, blockchain technology represents opportunities for leaders to embrace change and secure significant edges over their competitors.
Some may ignore blockchain as nothing more than a glorified Excel sheet or fail to see its utility, but they do so at their own peril. The technology is already gaining traction in facilitating the exchange of goods (both physical and digital), information, and online platforms.
Blockchain Creates Trust
Securing trust in transactions costs businesses and individuals billions of dollars every year. In the context of a transaction, the trust provider is a third party like a bank, an online merchant, the police, the government, or another authority. Trust providers charge for their services, though by the standards of blockchain technology, these services are obsolete and redundant.
Blockchain transactions are peer to peer (P2P) and don’t require the involvement of third parties to create trust. The blockchain and its algorithms are the trust providers. Companies can share data and engage in transactions without having to pay for the services of a trust provider. Thus, the possibilities are boundless.
Blockchain Helps Manage Supply Chains
Blockchain technology allows companies to track products from suppliers to consumers. By using blockchain, companies such as Walmart can iron out kinks in their supply chains, find and remove defective products, avoid misunderstandings, and support client loyalty.
Better Customer Service and Engagement
Blockchain-based loyalty services can enhance customer experiences, engagement, and loyalty. The transparency, immutability, and trustless nature of the technology create opportunities for engagement and redefine how people relate to goods and service providers.
Verifying Digital Asset Ownership
Digital assets can take an infinite number of forms. From digital art to shares in an organization and software licenses, blockchain makes it easy to verify ownership. People can transfer such ownership without stacks of paperwork or the aid of a third party.
One of the more controversial aspects of the technology, capital-raising, is a utility no leader can ignore. Blockchain technology makes it easy for organizations to create and sell virtual securities and allows for the free trading of these digital assets.
It’s impossible to predict how blockchain will benefit companies, but those benefiting from immutable records, public scrutiny, decentralization, and simple transactions will be in the first wave of beneficiaries. Blockchain cuts the costs of networking and verification.
Executive coaching encourages leaders to embrace change stemming from technology like blockchain. While blockchain is revolutionary, its current applications are limited, and it doesn’t offer solutions for everything yet. Centralization still has its advantages and is, in many cases, preferable to decentralization.