Leveraging blockchain to transform industry
By ATB Financial 19 December 2019 5 min read
Throughout 2017 and 2018, blockchain technology and the cryptocurrencies (e.g. Bitcoin and Ethereum) it enables dominated the headlines. Its promise to disrupt business models and transform economies around the world seemed imminent. So why hasn’t it taken off?
Barriers affecting blockchain’s adoption
Since most discussions focus on blockchain’s numerous benefits, its status as a foundational technology may have been glossed over. This means in order to establish blockchain, significant organizational, regulatory, economic, political and social conditions have to be modified or completely changed before it can gain groundswell. Making lasting changes in most of these areas can be costly and takes a considerable amount of time to achieve.
Another factor delaying its adoption is the technology is still maturing. The Gartner Hype Cycle tracks what phase in the maturity cycle a new technology or innovation is in. The Hype Cycle has five phases: Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment and Plateau of Productivity. “The Gartner Inc. 2019 Hype Cycle for Blockchain Technologies indicates blockchain is sliding into the Trough of Disillusionment. The market will begin to climb out of this Trough by 2021, as technology advances and pragmatic use cases uniquely supported by blockchain continue to roll out.”
Although it is ironic, another barrier has been blockchain’s key strength: decentralization. As a distributed technology it requires a Minimal Viable Ecosystem (MVE) in order to create value and operate. That ecosystem must include a robust digital infrastructure and governance framework that is built collaboratively, so each stakeholder receives full value from the solution. If all players contribute in the ecosystem and gain consensus, then the technology will continue to evolve, advance and take hold.
Blockchain to transform global industries
Despite these challenges and the reality that widespread adoption may be years away, blockchain is expected to drive the Fourth Industrial Revolution by merging with Artificial Intelligence (AI) technology. Dismissing it as hype would be a big mistake.
Mike Brown, ATB’s Director of Product Innovation couldn’t be more optimistic about blockchain and its capacity to lift up struggling industries and inject more trust into antiquated ones. “Now is the perfect time for industry, government and business to come together and leverage blockchain and other emerging technologies to build solutions that can be scaled. Alberta’s strong tech sector and history of collaboration will allow us to lead the way in leveraging technology to deliver global solutions. The good news is we’re definitely seeing more movement in this space. ATB is an active member of the Alberta Credentials Ecosystem, a cross-industry collaboration with some of Alberta's most innovative organizations, and a vital key to driving adoption.
There’s no doubt blockchain technology is an exciting development, with the potential to revolutionize many industry sectors. But, with so much hype around blockchain, how can we unearth its practical, everyday use? In other words, blockchain sounds great, but what does it really mean for business? Here are three great examples of significant progress and success in blockchain adoption and integration to foster industry growth and innovation.
Blockchain in the Energy Sector
As the price of oil plummeted in 2015, Calgary-based GuildOne, began collaborating and investing extensively in emerging technologies such as blockchain, smart contract, machine learning and artificial intelligence. This led to the release of Energy Block Exchange (EBX) in 2018, GuildOne’s blockchain business network for energy transactions. They were the first to transact an energy smart contract. In 2019, GuildOne applied for and was granted a patent-pending for ConTracks, their smart contract engine which automates payments and the transfer of currency or other assets as negotiated conditions are met. The flexibility and scalability of ConTracks is key to GuildOne’s ability to rapidly develop new use cases for EBX and advance its adoption in the energy sector in Alberta and abroad.
Blockchain in the International Trade Sector
On the other side of the world, IBM and global shipping leader, Maersk worked together to develop TradeLens, a blockchain platform that makes the international trade process more visible, secure and flexible. Backed by major industry players around the world, it “empowers businesses and authorities along the supply chain with a single, secure source of shipping data, enabling more efficient global trade,” adds Brown.
The TradeLens platform processes more than 10 million events each week and tracks shipments in real time. Using blockchain encryption and permission-based sharing, the platform has bolstered trust and transparency improving data sharing and collaboration with shipping partners.
Blockchain in the Food Supply Sector
IBM Food Trust™ has built their ecosystem by connecting producers, suppliers, manufacturers, retailers and other participants across the food supply chain, updating the standard for handling and tracing food from 7 days to 2.2 seconds or the speed of thought. Until now, the food supply system relied on manual and paper-based methods resulting in a costly inefficiencies, lack of visibility and trust. Food Trust’s blockchain enabled platform is permissioned, permanent and provides a shared record of food system data.
“As of July 2019, the Food Trust ecosystem has 100+ global and diverse ecosystem members with 12M+ transactions representing over 8K products, 6M+ food products on retail shelves, 500K traces conducted to date, and the top 4 food retailers in the United States on their platform,” says Brown.
Integrating emerging technologies into your organization
Dipping your toe in the blockchain pond may be easier than you think. A low-risk place to start is with single-use applications. They can be conducted with fewer third parties being involved and can help organizations develop the skills, partnerships and insights required for more complex applications. Another good place to start is to look around your industry and look for partners trying to solve similar problems of friction and inefficiencies.
Depending on how well your proof of concept trials go, you may want to join an existing ecosystem or apply to be a member of the digital technology supercluster. The Government of Canada’s Innovation Supercluster Initiative has five areas of focus. The Digital Technology Supercluster encourages and leverages investment in emerging areas and strengthens supply chains through partnerships with the private sector, post secondary, tech adopters and government. The Federal government is splitting $950 MM between the five superclusters to drive growth, create jobs, develop the country’s innovation ecosystem and position Canada as a global leader in digital technology.
While blockchain technology is still in its infancy, and has a long way to go before it can be considered even close to mainstream, many industries are beginning to wake up to its advantages, and, as the technology matures, we can expect to see even more companies investing in blockchains.