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Blockchain Applications for Large Enterprises by Austin Higgins

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Blockchain applications for startups are on the rise. But most enterprise and Fortune 1000 business leaders don't know how to use this new technology to improve their business. This presentation dispells myths behind blockchain, an overview of why companies want to use blockchain, how blockchain is being build today, enterprise uses cases, the benefits of blockchain and what companies must do now to take advantage of this new technology.

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Blockchain Applications for Large Enterprises by Austin Higgins

  1. 1. ENTERPRISE BLOCKCHAIN PREPARED BY AUSTIN HIGGINS APRIL 2018
  2. 2. MYTHS ABOUT BLOCKCHAIN 1. There is only one blockchain that everyone is using 2. Blockchain will change everything we know about business 3. Blockchain is Bitcoin 4. Blockchain is only for currency or financial companies 5. We aren’t a tech company, so we don’t need to care about blockchain April 2018 2
  3. 3. WHAT IS BLOCKCHAIN? • Relatively new database technology that stores information and is accessible on a network • Not what you do but how you do something April 2018 3
  4. 4. HOW BLOCKCHAIN IS DIFFERENT • Database is distributed on a number of nodes (computers) in a network • Can be publicly available to anyone without giving permission or privately available to select few • Every node on the network has a copy of the database and can read and write to it • Each data element in the database is connected to the previous data element • Any changes must be accepted by nodes on the network to be validated April 2018 4
  5. 5. HOW BLOCKCHAIN IS DIFFERENT Distributed on a number of nodes (computers) in a network April 2018 5
  6. 6. HOW BLOCKCHAIN IS DIFFERENT Each data element in the database is connected to the previous data element April 2018 6
  7. 7. TYPES OF BLOCKCHAINS Public • Any node can join the network and read and write data to the database • Ex. Bitcoin Private • Only select nodes can join a network and must have permission from a central node • Ex. Corda April 2018 7
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  9. 9. WHY PEOPLE LIKE BLOCKCHAIN • Permanent. Once the data is added to the blockchain, it cannot be changed without changing every instance on every node. • Traceable. Each data element can be traced with a timestamp and tied to the previous data element. • Transparent. Any node on the network can see the entire history of the database. April 2018 9
  10. 10. PROS AND CONS OF BLOCKCHAIN Pros Cons Transactions are irreversible Transactions are irreversible Assets can be transferred safely, securely and confidentially Manipulation can still occur at some levels Transactions are immutable Potentially slow performance No need for ongoing intermediaries in transactions Need for ongoing consensus mechanisms High quality data Redundancy in consensus across the network April 2018 10
  11. 11. ENTERPRISE BLOCKCHAIN MONETIZATION • Transaction costs. Blockchain can facilitate transactions automatically with no intermediary systems, tools or organizations. • Data quality. Higher quality data results in better decision making processes. • Employee overhead. Blockchain and smart contracts can eliminate the need for certain human checkpoints in a process. • Customer and partner loyalty. Enhanced quality, trust and transparency can increase loyalty from both customers and partners. April 2018 11
  12. 12. SMART CONTRACTS ON BLOCKCHAIN Definition A software protocol contractual agreement that automatically facilitates, verifies and acts out the agreed upon Benefit • No third party is needed to verify the terms of a contract or to enforce the contract • Lower costs with transactions, validation and processing Use Cases Sharing medical records. Medical records can be instantly shared between various third parties when one of the third parties meets a predetermined criteria. The software protocol facilitates the criteria, matching and distribution of data. Royalty distribution. A company can distribute royalties for digital products. The owner, transaction, recipient and all payment information can be executed immediately with a smart contract. Insurance claim processing. A smart contract can augment traditional insurance claim processing acting as the binding agreement between insurer and the parties insured. April 2018 12
  13. 13. HOW BLOCKCHAIN IS BEING BUILT April 2018 13
  14. 14. Hyperledger Ethereum Description An enterprise-grade, general purpose blockchain ledger designed to be privately used with no currency An open, all-access general purpose blockchain ledger to build mass-appeal smart contract applications with Ether Permission Private, permissioned ledger Public, permission-less ledger Token No token required Utilizes Ether (ETH) Consensus Practical Byzantine Fault Tolerance Proof-of-Work (mining) Partners IBM, Intel, Accenture, SAP Microsoft, Intel, JP Morgan April 2018 14
  15. 15. AGRICULTURE SUPPLY CHAIN USE CASE IBM is working with Wal-Mart to create a private blockchain to trace food products from origin to consumption so Wal-Mart can quickly react to any food recalls. Crops Storage Processing Distribution Retail Consumption April 2018 15
  16. 16. FINANCIAL TRANSACTION USE CASE R3 is working with a group of financial institutions to create a private blockchain to eliminate the need for intermediary transaction companies for speed of use and cost savings in financial transactions. April 2018 16
  17. 17. QUESTIONS TO ASK WHILE PURSUING BLOCKCHAIN 1. Which of your existing partners and what other institutions need to participate in the blockchain to make it worthwhile? 2. How much and which data should you reveal and to whom? 3. What data do you have that might have value to others and is there a way for you to benefit from that value? 4. Which intermediaries in your ecosystem exist simply to certify trust or handle complexity? 5. How would new access to customers demand signals change my operations? April 2018 17
  18. 18. PROBLEMS BLOCKCHAIN CAN SOLVE 1. Challenges with trustworthiness between multiple parties 2. Automated transactions and decisions based on predetermined rules 3. Chain of custody documentation in a complex supply chain 4. Democratization of privately held data April 2018 18
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  20. 20. CHALLENGES WITH ENTERPRISE BLOCKCHAIN ADOPTION • Nascent Technology. Blockchain is relatively new and not proven in major enterprises. Technology talent is scarce. • Scalability. Transaction speeds are still relatively low and may not be able to scale to enterprise needs. • Human Process. Data needs a source. Not all human processes can be solved with new database schemas. • Occam’s Razor. Many business problems can be solved with existing database technologies. Blockchain may be an excessive solution. April 2018 20
  21. 21. WHAT ENTERPRISES SHOULD DO 1. Watch. Pay attention to the blockchain ecosystem and what other companies are doing in your industry. 2. Evaluate. Evaluate your own business processes and data needs to identify where blockchain could potentially fit in. 3. Talent. Build up internal technical talent and partner with organizations that can deliver technical and business talent for nascent technologies like blockchain. 4. Test. Prepare and run small-scale, proof of concepts of blockchain for your business processes. April 2018 21
  22. 22. April 2018 22 AUSTIN HIGGINS AMHIGGINS.COM TECHNOLOGY CONSULTANT, UNIVERSITY LECTURER
  23. 23. BLOCKCHAIN INDUSTRY DATA April 2018 23
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