Much has been said about blockchain technology and its potential applications, but can it really usher the world into a future where traceability, identity security, and speedier, more secure transactions are no longer nagging problems for businesses and individuals?
At CeBIT Australia 2018, leaders from four tech-forward businesses discussed their views on how blockchain’s impact reaches well beyond Bitcoin, and what challenges currently prevent the technology from scaling globally.
Sharing their views as a panel were Chris Connor, Executive Manager Emerging Technology, at Commonwealth Bank of Australia (CBA), Fergus Park, Head of Product & Portfolio Management at Amadeus, Aimie Rigas, Community & Marketing Manager at PowerLedger, and Dr Ingo Weber, Principal Research Scientist & Team Leader, Data61, CSIRO.
Blockchain technology beyond bitcoin
An enabler for transacting renewable energies, the missing link that “unites” other emerging technologies (like the Internet of Things), and a changemaker in the travel industry – that’s the future of blockchain technology use, according to the panelists speaking at the session Beyond Bitcoin – How blockchain is revolutionising the world.
While many businesses have progressed in their approach towards the technology today – moving past creating abstract experiments and testing out theories and toward formulating use cases they can capitalise on - blockchain is still an unexplored opportunity for most.
CBA, for example, spoke of the commercialised blockchain solution it successfully trialled in South Africa, TymeDigital. The application uses blockchain technology to authenticate an individual and verify address details so they can transfer money, easily and within minutes.
Blockchain technology is also slated to change another industry – travel. The travel industry today is made up of multiple companies passing data between one another, for instance when travel agents pass on customer details to airlines and hotels. Blockchain technology can make accessing and storing such sensitive information easier and more reliable.
It can also be used to improve the traceability of lost baggage, and therefore improve the response time airlines and airports can provide passengers. As a result, it has the potential to improve trust among all parties in the travel industry, and set new standards in customer service.
Challenges with proliferation
Although many companies have progressed overall with their blockchain initiatives, there are still a few key challenges preventing global proliferation of the technology:
- It’s expensive to implement – although blockchain technology promises several long-term benefits, including improved productivity, efficiency and reduced costs, it is costly to put it in place. Organisations must first find or develop the right software, incurring high initial outlays. Organisations that want to make the move to blockchain must find a way to integrate the technology into existing legacy systems, a task that requires considerable commitment and change, both financially and operationally.
- A lack of skilled personnel – In addition to software costs, organisations must also build the right teams of people to work with and use the technology. And because blockchain is experimental for many companies still, it’ll see zero ROI until it can be commercialised successfully. Furthermore, as proficient professionals are few and far between right now, organisations must be willing to pay much more to individuals who are qualified for these roles. This makes it challenging for SMEs with limited resources to access the same in-house capabilities.
- It needs a lot of energy – according to Nasdaq, the Bitcoin and Ethereum networks use mechanisms requiring the computation of complex mathematical problems, which in turn requires large amounts of energy to power the computers solving the problems. In fact, the energy required to power a bitcoin network is estimated to be the equivalent of that used by 700 average American homes.
And although there’s truth to early adopters reaping long-term benefits of tech adoption, who’s to say that blockchain technology is not just a passing phase? According to Gartner’s latest Hype Cycle for Emerging Technologies – blockchain technology is already past the point of inflated expectations.
“There is this tendency to overestimate the potential of new technology in the short run and to underestimate in the long run. A lot was promised with the dot-com bubble, and the industry, by and large, failed,” said Dr Weber.
All panelists agreed however, that there is a clear opportunity for blockchain technology to work beyond a distributed database.
In the above mentioned travel industry example, Park says that blockchain technology has plenty of potential to further enhance frequent flyer and loyalty programmes, improving the speed of recognition at lounges for example, and simplifying how points are gained from partner programmes using smart contracts.
Although blockchain technology is still largely nascent, there’s no doubt that there’s a great potential for it to revolutionise the world as we know it, particularly in the areas of FinTech and travel.
But the use of new emerging technology also warrants extra care in security. Our guide, Cautionary tales: Cyber security and the Internet of Things, examines some of the most infamous cases of cyber-attacks to help leaders understand the biggest challenges in cyber security, and how to prepare for future attacks. Take a look before you do anything else.