101 Blockchains is blockchain research and strategic consulting company. We are focused on blockchain education and also working on pushing the boundaries of public perception and understanding of blockchain technology.
The World Trade Organization released a report on blockchain technology’s effect on international trade a few months ago. According to the report, Blockchain’s economic value-add on a global scale could reach almost $3 trillion by 2030.
We will start with a few blockchain basics slides to make sure we are all aligned with the business blockchain:
2) Public vs Private Network
Until now, the industry focus was primarily using public networks. Thanks to bitcoin, the first generation cryptocurrency that bought the idea of blockchain to us. It is then improved by second-generation Ethereum which introduced smart contracts and dApps. Later on, other public networks such as EOS, NEO, etc. also made it to the market with improved implementation and sometimes different approach.
On the other side, we have a private network structure. In the past few years, hundreds of enterprises were building private networks or as called permissioned networks were every user is identified, verified and receive access to data according to his defined permissions. This is how enterprises are adopting blockchain technology. One of the leading frameworks that offer permissioned network includes Hyperledger. We will talk about it later on.
But, do we need to adopt blockchain technology? Let’s explore it in our blockchain technology presentation.
3) Key Features of Blockchain
So what makes blockchain technology so unique? Why are so many enterprises currently developing their own blockchain-based applications?
if we study the enterprises and how they are using the blockchain technology, we can see the following top features that are utilized by them.
- Decentralized and distributed: A blockchain is a decentralized, distributed digital record of transactions (ledger) that is secured using various cryptographic techniques.
- Enhanced security and immutability: Every transaction is first verified before being added to the blockchain. Once added, they cannot be modified by any means. It is also easy to track transactions and verify them through peer-to-peer consensus algorithm.
- Distributed Ledgers: All members in the network have access to the same “version of the truth“, but no single user can control it.
- Consensus-Based: In order to add a new transaction, we need to achieve network consensus. This creates a trustless environment. Without efficient consensus mechanism, we would have a slow and expensive database.
- Faster: Thanks to consensus mechanism, we have the trust and can approve transactions much faster.
Blockchain is, as The Economist (2015) calls it, “a trust machine”.
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4) History of Blockchain Technology
Is blockchain overhyped? The answer is yes. Even though blockchain might sound overhyped, in reality, blockchain has improved a lot in the past few years.
You should also be familiar with the Satoshi’s white paper which was released 10 years ago. Another big event is the release of Ethereum blockchain which introduced two important concepts, i.e., smart contracts and decentralized application(dApps). However, two more major events influenced the enteprise blockchains world. They are as follows.
R3: In 2014 Blockchain Technology R3 was formed. Forms Consortium is also established with over 40 legacy financial companies for implementing blockchain technology. R3 blockchain platform named Corda has a strong presence in the finance sector which signals about the success of the project.
Hyperledger: In 2015, the Linux Foundation unveiled an umbrella open source blockchain project called Hyperledger. Under the leadership of Brian Behlendorf, Hyperledger is being used almost in all enterprise blockchains projects.
These 2 events are major events which shaped the current blockchain ecosystem. Instead of having one big network we have many customized dedicated networks according to each organization needs.
We are not sure how blockchain will perform in the future, but 2019-2020 are defiantly the years of the enterprise blockchains. This is where we will witness more and more dedicated networks which will serve specific use-case. In short, we will see more examples of distributed ledger technology(DLT) being used in centralized organizations.
5) Types of Blockchains
Basically, there are three types of networks: Public, Private, Federated
In a public blockchain network, anyone is allowed to join and participate. Not only that, everyone is also allowed to go through the ledger and participate in the consensus of the network.
In private blockchains, a single organization will have authority over the network, where they will dictate on who can join and access the network.
Think of it as a centralized-decentralized network.
But with federated blockchain, you’ll get a decentralized private environment.
Sound confusing? Don’t worry, we got you covered. In federated blockchain instead of one organization maintaining the network, there would be multiple organizations who will take decision making role.
The presence of multiple parties on the network establishes the decentralized structure of the federated blockchain.
There are also two types of permissionless blockchain.
Permissionless is open to everyone to join, view and precipitate.
On the other side, permissioned enterprise blockchain doesn’t necessarily need to have a native token or asset for their platform, they also do not need miners, and they also do need tokens. They are permissioned which means that their owners tightly control it and customized to their needs.
Want to know more about Blockchain Transformation? Check out our Enterprise Blockchains Guide!
6) Use Cases Value > Implementation Challenges
There are many different use cases for blockchain. However, there are implementation challenges as well as pertaining to each use case. The trust provided by blockchain creates a whole new value as it enables organizations to handle counterfeit and corruption in a much better way. It also improves supply chain, automates processes and improves data storage and access.
By using blockchain technology, banks can make their users the center of their user experience. Right now, most of the major banks are already in the process of examining and adopting blockchain technology, even though they are not found of bitcoin.
As we already mentioned, there are implementation challenges considering it is still a new emerging technology. However, the value continues to grow as we can see from the current blockchain ecosystem around us. With time, we will be able to solve more challenges and incorporate blockchain technology better.
Two key use cases of blockchain technology include tracking products and managing supply chains. One vertical that benefits immensely include the Oil & Gas Vertical. Shell is currently investing in blockchain as Accenture reports suggest that blockchain can save 5% revenue just by improving accuracy.
Most of the time when people think about blockchain they think about bitcoin. Bitcoin is blockchain first generation cryptocurrency but blockchain is more than a cryptocurrency.
7) Non-financial Enterprises
As you can see, there are 20 leading enterprises which are currently examining blockchain technology.
- Automotive giants like Ford & Toyota implementing blockchain in their smart mobility solutions.
- Retail giants like Walmart and Nestle are implementing blockchain for tracking food products. Walmart is utilizing IBM Food Trust for everyday operation, it uses blockchain to track and manage all its retail goods.
- Insurance giants like Metlife & Prudential are experimenting blockchain with automated insurance claims and trade solutions
- Shipping giants like FedEx & Maersk are establishing platforms powered by blockchain that will monitor shipping of cargo.
- Even Facebook is working on its own blockchain team to examine the value added of blockchain technology.
But that’s just the tip of the iceberg. Let’s look at more interesting projects, especially related to federated networks.
8) Federated Blockchain Networks
During the past three years, massive efforts are taken in establishing federated networks. More than dozens of projects are utilizing Hyperledger or R3 Corda, as we can see in the infographic! We now have a trusted environment between groups of banks, insurance providers, and supply chains.
Federated network is the next step in the progress of blockchain technology. Its next phase will be to deploy an added value application(s) that will run on top of these networks.
One Example is B3i which is using R3’s blockchain technology for digitizing all official insurance documentation. This will enable the companies to streamline their services and ensure better satisfaction from their consumers.
There are also some major software vendors which are already taking an active part in this new ecosystem. Let’s explore them.
9) Enterprise Blockchains Ecosystem
The Enterprise Blockchains Ecosystem is super-fast evolving with vendors which offer blockchain as a service. We will also have different enterprise blockchains platforms such as Corda, Hyperledger & Ethereum.
These vendors are currently active and are investing efforts on the technology developments and also on the sales and marketing aspect. As of 2019-2020, we are going to see more and more investments by these vendors.
Oracle also recently announced that there are more than ten projects in production on their blockchain as a service platform.
Oracle like most of the rest developed their blockchain platform on top of Hyperledger framework. Hyperledger was first to focus on dedicated networks and hence have the first movers advantage.
Let’s drill down further to Hyperledger ecosystem.
10) Hyperledger Blockchain Ecosystem
Hyperledger is known for its ecosystem and hence is one of the most popular enterprise blockchains. It is actively used by major supply chains such as Food Trust with Walmart.
Hyperledger is co-operating with all the vendors, and as we can see the results with Oracle, AWS, Microsoft AZURE, even Samsung is developing its blockchain application utilizing Hyperledger.
In Hyperledger vision, “there will be a world of many chains, some public networks like Bitcoin and Ethereum, some private networks, some permissioned, some without. Every community can have its own type of network.”
Similarly the Apache web server gave people the tool to build their own website rather than making them use one big site.
- London Stock Exchange Group: London Stock Exchange Group is using Fabric to create a financial business network. They plan to use the network to achieve interoperability with their existing systems, thus promoting their efficiency.
- T-Mobile: T-Mobile created the Sawtooth Hyper Directory using Hyperledger Sawtooth to provide Access and Identity management solutions.
Healthcare is also one of the leading healthcare enterprises to adopt Hyperledger. Let’s dive to the Healthcare vertical.
Distributed Ledger Technology can actually save a life! How?
- By tracking the supply chains, counterfeits are kept at bay – With around 10 to 30% of the drugs counterfeit, the drug counterfeit is a big problem for the whole health industry as it amounts to $200 billion annually.
To stop drug counterfeit, all drugs are first registered on the blockchain before they leave the manufacturing firm. This means that if a drug’s record is not found on the blockchain, it can easily be identified as counterfeit.
- We can put an end to the silos of data and by utilizing the network of trusts. We can enable transparency faster and in a better way. Clinical trials produce tons of data and blockchain technology can help them store in a distributed network, making them easily accessible to everyone. The data includes statistics, reports, surveys, medical imagery, blood tests and so on.
- The claim process is improved by sharing the data securely. Healthcare billing and claims suffers from fraudulent activities. Blockchain can truly transform the claim process by providing a trusted network.
Blockchain’s impact has also been seen on government services. Let’s explore them next.
12) Blockchain for Government Services
Blockchain offers a layer of the trusted network where there will be paperless documentation for the governments. The key here is paperless documentation as we all know how papers can bring in lack of trust as it means data can be manipulated or error can go through.
Not to mention, the paperless system can process a huge chunk of data at once such as bill payments, visa applications, and more.
Here is just a short list of countries which already adopting blockchain to improve their services, increase transparency and fight corruption.
- Switzerland: The city Zug created a new platform called ZugID. This application will let all the citizens of Zug, to get access to e-governance in a secured manner.
- Brazil: The government teamed up with uPort for IDs and documentation.
- Estonia is an excellent example. They already implemented blockchain on their lands registry in 2014.
Voting is also one of the best example showcasing how governments can adopt blockchain.
Trust is a core capability which thrusts blockchain into the government processes. In each one of the government entities, trust plays an important role. As each system is complicated and involves few stakeholders, Distributed Ledger & Blockchains seems to be the right technology for transforming the way we interact and function.
13) Centralized vs decentralized Internet
Now let’s take a moment to understand why blockchain is a fundamental technology. It is trustless. It is a whole new network structure where instead of having one single authorization entity we have a network where every node can participate in the consensus method. It also means new data flow as each node is connected. Not to mention, it also means new business models.
Blockchain offers tons of business opportunities to the current companies. Uber & Airbnb is a great business model of Web 2.0. Both Airbnb and Uber are founded in 2008 and 2009 respectively whereas the internet first went public in the early 90s. This means we need to be more patient when it comes to innovation.
Let’s look at the history of the history of the web more deeply.
14) Web 3.0 will be powered by Blockchain
Let’s take a look at the history of the web. We all are familiar with Web 1.0 where emails are the norm. But at that time, we complained about how we cannot send photos. However, it slowly scaled thanks to the engineers working to improve it.
Technological advancement never stopped as we Web 2.0 soon transformed the internet around us. It gave rise to the information-centric internet with services such as Wikipedia, Youtube, and Facebook. As of now, these big companies control the internet and its users.
Similarly, Web 3.0 will be the future as it is going to transform the world around us completely. Web 3.0 is unique because of two reasons.
Blockchain is all about Trust
Blockchain will make people valuable again
Distributed Ledger will serve as key infrastructure layer in a new internet of trust where different devices including smart cars can interact with each other and achieve agreement utilizing consensus method. User privacy will also be improved where users will feel safer and connected at the same time.
So, is Web 3.0 a possibility? Of Course, it is, but there are obvious challenges that it first needs to overcome. Let’s look at the challenges below.
15) Top Blockchain Adoption Challenges
We can divide the top blockchain adoption challenges into two main categories: Human Factors, Technological Factors.
We can speak about regulations, public perception, skill set, but at the end of the day, it is all due to lack of knowledge. And, this is exactly what we are doing @ 101 Blockchains providing valuable information to their readers.
- Criminal Connection
- Public Perception
- Skill Set
- Technological Design
- Energy Consumption
16) Blockchain Transformation Playbook
Blockchain implementation is far more complex when compared to general application install. This means that you cannot ask your team to install blockchain just like you do to install a web server. Blockchain provides a robust network where each process can interact with each other and maintain a high level of trust and transparency.
From our experience, the five steps to achieve blockchain excellence within your organization include the following:
- Start Small
- Build A Task Force
- Train & Educate
- Develop Strategy
Check out our Ultimate Blockchain Business Strategy Guide and get started!
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18) Thank you
Thanks for reading. We are at a fascinating stage as more enterprise blockchains are adopted industry wide! You can also start learning about blockchain, and it is never late to start learning.