Bitcoin. Decentralization. Smart Contracts. Everywhere you turn, these buzzwords are being used constantly – all referring to a hot new technology known as blockchain. It’s becoming a massive tech movement and countless companies are not only getting on board, but also finding new, innovative ways to use blockchain technology.
But where did it come from? Where can it go? Let’s take a look at this groundbreaking technology, discuss some of its potential uses, and help give an understanding of what companies are doing to make blockchain a part of the customer experience.
What is blockchain?
Blockchain technology was first designed in 2008 by Satoshi Nakamoto. Right off the bat, things get interesting. “Satoshi Nakamoto” is a pseudonym – no one actually knows who Nakamoto is. In 2008, Nakamoto sent out a publication in a cryptography mailing list outlining both the concepts of blockchain technology and the most popular application of blockchain – cryptographic digital currency, or “cryptocurrency” for short (most people know of one variation: Bitcoin). Since then, the concepts have ballooned into various forms of currency, programs, and technology, with many applications yet to come.
Blockchain’s main goal is trustless decentralization of data. “Trustless” means that there is no need for a trusted third party to handle a transaction of data, and “decentralized” means the data is not sitting on one single point server.
Instead of keeping all data centralized on one or a couple of company-owned servers, it distributes the data across the entire network of computers on the system (each known as a “node”) such that there is massive redundancy and lack of point vulnerability. When a change is made, it’s transmitted to the whole network, and the overall network is updated with the change.
This makes it hard to attack the data; given that the data is distributed across all the computers on the network, you would need to have the processing power of all of the computers on the network (which can range from thousands to millions to billions of devices) in order to make an unauthorized change – no single entry point can be used to access all the data like with the centralized model. With this kind of security and use of cryptographic technology mixed into everyday applications, blockchain is poised to reshape the way that data is distributed and accounted for.
What are blockchain’s implications and uses?
This type of data safety is the “holy grail” for many business applications. The first space that it has made an impact is the finance world – where Bitcoin has shown its power in changing the conversation around finance technology for good. Banks have already announced huge partnerships with tech companies in order to create distributed ledgers, smart contracts, and redundant banking applications so that people feel safer about their money.
Additionally, blockchain is showing promise in many spaces – audit, IoT, insurance, tax automation, digital voting, and medical reporting to name a few potential applications. Not only can blockchain make complex processes more automated, it can reduce operating costs and streamline business processes drastically as well.
How could blockchain impact customer experience?
Blockchain has various applications for the future of computing – many of which we have not even identified yet. Predicting blockchain’s future would be like attempting to speculate how revolutionary smartphone technology would be on the day of the first iPhone’s release. Despite the uncertainty, there are immense projects underway that incorporate this technology into existing and new company IT infrastructure and others being defined to allow blockchain into the world of business applications – and namely, customer experience (CX).
One of blockchain’s key features is its ability to create business transparency. Since it depends on visibility of transferred data, this feature can be leveraged to foster trust among consumers (for example, a company-owned portal that shows all blockchain activity associated with a customer, which the customer can view any time in order to see how their business relations stand). This can create increased brand loyalty, and better CX overall thanks to this increase in trust.
A huge potential application for CX applications is to change the underpinnings of the way finances are handled in CX apps. Instead of requiring a completed order to go through a standalone accounts receivable tool and risk the security concerns of that interaction of data, the application could simply use blockchain in order to confirm an order/payment has been completed, and can move the business process along shortly after confirmation is received. This could also reduce the amount of human capital required to sort through and verify these sorts of transactions.
Furthermore, trustless contracting can allow for contracted distributors and freelancers to be paid efficiently upon completion of a project or an order. Given that this is occurring in the technology space, the parameters can be defined prior to completion, and once the parameters are met, the completion of the contract can happen automatically. This has large implications for human capital expenditure and speed of business processes.
Finally, the concept of an open distributed ledger and its implications on CRM is probably one of the most prominent disruptions we could see. A distributed ledger leveraged in CRM could allow quick existing data matching and merging, along with data integrity checks that happen with every block generation that occurs (which, on existing blockchains, can happen as frequently as a few seconds apart).
As of right now, blockchain is being applied heavily in the financial technology space, most popularly with Bitcoin, as well as a slew of other cryptocurrencies that are available on various global exchanges that run around the clock. Each of these coins act as a piece of technology on which we can build new applications, features, and projects. They also act as fundraising tools in this new market for startup companies.
A new economy is being created, and it’s only a matter of time before large existing companies go public with their uses of blockchain technology. As we move forward, we may see blockchain permeate all technology spaces – and soon, it could become a part of your life in more ways than we can imagine.