The word itself hides the meaning in it “Block Chain”, which means loading transactional data in blocks which are linked together in chain. As transaction increases, so does the block chain, which are recorded as per time and sequence. Block chain uses Distributed Ledger Technology (DLT) in which ledger is shared with the concerned person and the transaction entered once cannot be altered by anyone which will reduce the chance of duplication. One of the well-known examples of block chain technology is Crypto currencies i.e. Bitcoin. Bitcoin is using block chain technology in which the holder can store its bitcoins in a digital way in its block chain account and can transfer digitally through the online channel to another party by applying digital signatures. Many misunderstand Bitcoin is block chain technology but instead bitcoin is using one of the block chain technology to hold and transfer the digital currency. Below is the process of Block chain:
Types of Block chain technology
Majorly there are two types of Block chain Private and public, other two have emerged from this only which is consortium and hybrid Block chain.
Current adaption of block chain
Pharmaceuticals: With improper medicine given, each year many lives are getting into danger but with this technology many lives can be saved by tracing the origin of that drug manufacturer to the end till the consumers consume it. With the help of block chain the particular medicine can be traced throughout the whole supply chain process (from where the raw material occurred till the consumption of the consumer) so that if any hindrances are there it can be removed. The data related to this is secure and no one can tamper this and all stakeholders can validate it with the time.
Food: Important thing in this sector is to trace the source of food where it is coming from, in global food supply chain industry the grower, supplier, processor, distributer, retailer, regulators and consumers can have a look into the whole supply chain, by using block chain consumer gets information about that product in seconds and if during any outbreak it can save many lives by tracing the source of that outbreak.
Banking: Block chain is helping consumers in doing commercial transactions by providing. Peer-to-peer payment system which is cost effective, safe and with less charges. Block chain helps parties to come into an agreement without any middleman coming in between by proving a ledger that nobody administrates and also it can provide financial services like payments and securitization without using a middleman like a bank. All transactions are stored online and to access that transaction is up to the parties who are involve in this and they can allow the access to others regarding the transaction if they want to.
Fashion: Many consumer complaints are regarding that, the low quality of cloths which have been produced by some of the companies. But with the help of block chain technology, Manufacturers and designers can protect their brand against the duplication of their brand. Some manufacturers produces duplicate products of the originals so by using block chain the original manufacturer process can be traced but the counterfeit party production source cannot be traced and if traced it will be different and that’s how they can be easily rooted out. The manufacturers have started to put Near Field Communication (NFC) chips in their apparels which will help consumers to track down the whole journey of the product.
Healthcare: In healthcare industry the biggest problem lies in storing patient’s data into the system of hospitals. It is open for all so anyone will have an access to anybody’s health data because files are located centrally. But with the help of block chain technology the patient’s information will be secure in the database and access to that will be held by patient itself unless the access has been given to anybody else by the patient. For example a patient had an accident and needs to operate so doctors had to see his previous health conditions of the patient to operate, so if the patient is having such kind of technology where he has kept in database and shared its health records with the family then by login into it the doctor can immediately know patients past health history and will operate accordingly and that information will stay between patient and doctor only.
How to avail Block Chain technology into business
There are 2 ways to adapt Block Chain technology
-Organization can hire a Software developer
-Organization can purchase the available architecture or customize it from available developers
Generally people adopt the second alternative, because it becomes comparatively easy as the developers are experts in their field & helps the team to understand the technology by training. Points to be taken care of while implementing block chain.
Costs: Company should be ready to bear all type of cost which will be associated to the block chain or not such as storage cost, power cost, and maintenance cost, etc.
Resources: Resources like computers, internet service must be available which can support block chain technology if company is willing to invest in it
Skilled Workforce: The work is not completed just by installing the technology by the developers, the main thing is how much understanding is there by workers regarding to technology because they are the one who will use so the employees have to be trained or hired who can handle and understand this technology
Strong and Organized Supply chain: In order to use this technology efficiently the supply chain should be organized and in line with otherwise this could be a disaster for the organization
Benefits of using Block Chain
End-to-end Traceability: Supply chain parties or stakeholders involved in that transaction can trace the product from the starting point (from where the material has come) till production and dispatch and till the consumer consumes that product. If I take an example of a consumer if before buying he wants to ensure that the product is safe or not he can see the origin and after get satisfying he can purchase the product.
Cost Reduction: Using block chain technology, there is no need of third party like it is been needed other transactions and contracts for guarantee, the important thing in block chain is the data validation and if data is correct then there is no problem to deal with.
Secured Transactions: Once the transaction is done it has been saved in the blocks which contain code of previous block and the same time transactions are highly encrypted with code so to crack that is quite difficult. Like this block joins in chain and block chain is created.
Transparency: The ledger containing various accounting transaction which if made available for public then anybody can watch it and this type of things creates transparency.
Smart contracts: Contracts, in which set of rules have been identified early and stored in block chain and once identified it can execute automatically.
Challenges of using Block Chain
Cyber Fraud: Block chain has somehow given a way to criminals and terrorists to buy and sell some of the products which are ban to deal with. All this things are done using bitcoin and it is been used widely as money laundering and for ransom payments.
Lack of block chain understanding: There are many block chain technology implications prevailing in the market by different organizations in their different methods as there is no uniformity in the method so there is a lack in understanding the block chain by people.
Incapability in handling transaction at a time: Block chain technology can handle 3-4 transaction at a time to be proceed with which is very low as demand is been in increasing trend so this is to be taken care off. For example visa can handle up to 2000 transactions at a time and so does it has to be seen in block chain technology.
No Standardization: There are many block chain platforms and projects in the market each of this projects has its own set of rules and codes they are working with so if in future this technology is used it should have a single set of roles and structure which is standardized and can improve cross-platform collaboration.
Regulatory Boundaries: Many countries because of security concerns are not allowing bitcoin like block chain technology to get into it and have kept a ban to deal in it. If block chain will be standardized and regulated by an independent authority then it is possible to increase its more craze amongst people.
Conclusion
Every technology has its positive and negative outcomes, every new technology creates disruption and so does block chain will create one, although many see this as a threat but in real it is an big opportunity for the industries and as well as organizations, block chain could promote the development of a larger ecosystem which can include both the old way and new innovation. Block chain in future can be a competitive advantage for those who will adapt this technology.
Author:
Saloni Surani, a Strategic Business Consultant, who pursued her Masters in Management & has an eclectic experience in J.Hirani with various industries like Manufacturing, Real Estates, Hospitality, FinTech, etc. She is a keen observer who silently achieves her goals and happily surprises everyone with the results. Adapting & learning new things has been her forte which helps her in getting new ideas always, anyone who wants to refresh their Values- just look at her.
Harsh Pavani, a PGDM graduate in Finance is associated with J.hirani as a Business Analyst, who is a great believer of ethics and likes to stay quiet and humble. He is always ready to learn something new and has worked closely in the industries of manufacturing and hospitality.
About J.hirani: J.hirani is a Strategic Transformation team which works as a growth partner for different organisations in various industries by providing services like Agile transformation, Scenario mapping, Strategic alignment, Balance scorecard, Digital transformation, Incubating new ventures, Operation excellence and Aligning human capital.
©J.Hirani, Block Chain:-A next Gen Technology, July 2020. All rights reserved
