Blockchain is expected to create $3.1 trillion in new business value by 2030, according to Gartner, but since the technology won’t be fully developed until 2023, businesses should start investigating it right away. This is particularly true given that massive multinational corporations and digital behemoths are trying to increase their market shares by implementing blockchain components, particularly distributed ledger technology, to support a centralized mode of operation.
CIOs are therefore under pressure to advise on whether and how blockchain can be implemented in their organizations. Top blockchain technology companies that have set the groundwork for using and implementing the technology will be better able to stand out and compete more successfully in their markets and regions.
It’s important for CIOs to comprehend what blockchain is and how it operates, but even more so, how the technology can be applied to advance mission-critical business priorities or even completely disrupt the industry. However, only 3% of CIOs have a live, operational blockchain for their company, and those solutions that do exist tend to be more concerned with improving the efficiency of current processes than with disrupting the market and creating new value.
According to David Furlonger, Distinguished Vice President Analyst at Gartner, “Blockchain technologies offer a set of capabilities that provide new economic, business, and societal paradigms.” Decentralization and strategic tokenization in business models and procedures will be necessary for enterprises to fully utilize blockchain, even if these strategies are not simple.
Distinguished Vice President Analyst at Gartner, David Furlonger, claims that “blockchain technologies offer a set of capabilities that provide new economic, business, and societal paradigms.” Enterprises must be willing to adopt decentralization and strategic tokenization in their business models and processes in order to fully utilize blockchain, even though these strategies are not simple.
What benefit does blockchain provide?
In theory, blockchain eliminates the need for a lawyer, bank, broker, or government to mediate a transaction between parties who may not know one another.
The blockchain verifies participant identity, authenticates transactions, and makes sure that everyone abides by its rules. Huge business opportunities are opened up by the wide variety of assets that can be traded and participants who can participate, including machines.
For instance, autonomous agents acting on behalf of a driver could use data from sensors to negotiate insurance rates with various auto insurance companies once the technology is fully developed and integrated with complementary technologies like AI and IOT.
Distribution, encryption, immutability, tokenization, and decentralisation are the five components of a true blockchain.
Participants in a blockchain are geographically separated from one another but are linked by a network. Each user running a full node keeps an up-to-date copy of a ledger that is updated as new transactions are made.
Blockchain employs encryption to securely and partially anonymously store data in the blocks. Public and private keys are used in this process (participants have pseudonyms). Participants can keep their identity and other personal information private and only divulge the information required for the transaction.
Immutability: Completed transactions are time-stamped, cryptographically signed, and added to the ledger in a specific order. Records cannot be altered or corrupted unless all parties agree that it is necessary to do so.
Blockchain transactions and other interactions involve the safe transfer of value. Tokens are used to represent value, which can be anything from data to physical assets to financial assets. Tokens also give users the ability to manage their personal data, which is a key component of the blockchain’s business case.
Due to a consensus mechanism, nodes on the distributed network maintain both network data and the rules for how the network functions. Decentralization actually refers to the fact that no single organization is in charge of all the computers, information, or rules.
The Blockchain Spectrum from Gartner
Vendors are flooding the market with promises and solutions that are primarily focused on efficiency gains as the hype surrounding blockchain grows. CIOs should invest in solutions that offer genuine benefits and distinguish between real and partial solutions.
Tokenization and decentralization are lacking in the majority of early blockchain solutions. On its three-phased Gartner Blockchain Spectrum, Gartner describes these solutions as “blockchain-inspired.”
Phase 1: Solutions inspired by blockchain
This phase, which started in 2012, will last until the early 2020s. Distribution, encryption, and immutability are the only three of the five elements present in these solutions. These services frequently focus on streamlining current procedures in order to increase efficiency. They are frequently experimental and incompletely implemented.
Phase 2: Blockchain-compliant solutions
All five components are included in solutions during this phase, with the goal of delivering the full value of blockchain. Only startups are currently concentrating on this level of maturity, but Gartner anticipates that these solutions will start to gain traction in the market around 2023.
Phase 3: Enhanced-blockchain solutions
Blockchain-compliant solutions will be combined with auxiliary technologies like artificial intelligence (AI), the Internet of Things (IoT), and decentralised self-sovereign identity (SSI) solutions in the third phase of the technology.
According to Christophe Uzureau, VP Analyst, Gartner, “Enterprises can easily make mistakes that will put them out of position to fully capitalise on blockchain by being lulled into a false sense of progress and capability.” “Shift strategic investments to blockchain-complete solutions and away from blockchain-inspired solutions that reinforce centralised processes and prevent the enterprise from maximizing the business value of blockchain