- Blockchain technology is a work in progress.
Not only does the underlying technology
continue to evolve and mature,
but its features and applications are expanding rapidly.
By far the most compelling
and established uses of blockchain
continue to be cryptocurrencies
and solutions within the financial industry.
But other innovative uses are emerging.
What's making blockchain particularly valuable
is its use as a development platform.
The leader in this area is Ethereum,
a blockchain I mentioned earlier
that as a cryptocurrency called Ether,
and a fully fledged decentralized programmable environment.
The term smart contract is used to describe code
that runs on a blockchain.
A smart contract is a series of functions
that execute when certain conditions are met.
Unlike traditional contracts,
execution does not rely on, for example,
legal language interpretation,
or the promptness and discretion of humans.
Rather, smart contracts run predictably and accurately.
An example of a smart contract in a supply chain
would be the automatic confirmation of payment
for goods once delivered,
and the subsequent update of a stock inventory.
But consider the role of smart contracts
in improving the accuracy and efficiency
of thousands of common processes in real estate,
finance, healthcare, law firms, factories, and government.
Let's take a look at the important role of smart contracts
in the buying and selling of digital assets.
Today, a growth area for blockchain technology
is the ability to manage the authenticity
and ownership of digital goods,
such as photos and art.
Using non fungible tokens, or NFTs,
these crypto token store details, such as the owner,
and a description of the digital asset on a blockchain.
If the owner decides to sell the NFT,
it will be transferred to a buyer using a smart contract.
The transaction will certify the new owner,
transfer any monies due,
and conclude the sale without any loose ends.
All parties can be confident
that the new owner details a monetary exchange
will be confidently settled.
The rise of NFTs is notable, for example,
in the collector's space,
but also in any industry that wants confidence
in the authenticity of digital and even non digital assets.
NFTs are not without naysayers
who maintain that they're a novelty
and won't be sustained over the longterm.
In any case, we'll all find out soon enough.
Programmable blockchains, and in particular, Ethereum,
and its smart contracts
are powering a completely new set
of financial products and services.
Unlike the complexities of the traditional banking ecosystem
that have many requirements
and are not available to everyone,
decentralized finance, or DeFi,
only requires an internet connection.
DeFi services are global and open 24/7.
There's no central authority to block use,
deny services, or require pre qualified individuals.
Transactions are fast and free of human error.
Remember, it's the code that runs
and validates the processes, not the behavior of humans.
I've provided many examples of all the benefits
of an open, transparent, and public blockchain.
That said, many of the qualities of blockchain technology,
such as provenance, immutability, security, compliance,
and smart contracts are also attractive to enterprises.
However, for their needs,
they require a more managed environment.
Sure it's counter-intuitive in many ways
to the core spirit of blockchain technology,
but still it offers enough value
for a private permission blockchain to make sense.
A number of vendors are providing
private blockchains and solutions,
including Hyperledger Fabric and IBM Blockchain.
A rapidly emerging blockchain innovation for enterprises
is B-A-A-S, BaaS, or Blockchain as a Service.
This uses a cloud-based architecture
to enable the rapid development of blockchain solutions.
It's based on the increasingly popular use
of Software as a Service, or SaaS,
and provides all capabilities on demand over the internet.
In addition to quickly creating solutions,
BaaS keeps maintenance low
and provides easier access to state of the art
blockchain functions.
Organizations can quickly build and deploy blockchain apps.
Providers such as Microsoft and Kaleido
are offering full service BaaS solutions.
Assuming BaaS takes off,
and the evidence suggests that will,
this will likely result
in the broader adoption of blockchain.
There's little doubt that blockchain innovation
continues at a rapid pace.
The examples in this video illustrate
how the technology is growing and broadening its value.
It will be fascinating to see what it becomes
and the value it will provide in the years ahead.