Relegated for a time to blockchain-specific media, towards the end of 2020 and into early 2021, mainstream media outlets once again began reporting on Bitcoin and blockchain, due to the huge gains that the cryptocurrency was (and still is) posting.
We are here to talk about enterprise blockchain adoption, so you may be wondering why we have begun by mentioning Bitcoin. As an article from a couple of years ago in Forbes points out, blockchain, like the internet, is not really understood. This lack of understanding is what is keeping people from properly engaging or investing in any area of blockchain; however, when big players such as Tesla, Square and Chinese app Meitu buy up cryptocurrencies, they are not only giving a signal that they believe they will profit from their investments, but also that they trust the system cryptocurrencies are built on. This causes further people and companies, to adopt, invest in and therefore grow the entire blockchain ecosystem.
Enterprise blockchain review
A quick recap, enterprise blockchain is simply a blockchain built or customized for the purposes of streamlining business processes. At the moment, they are mostly permissioned private blockchains, such as IBM’s Blockchain Platform, which is built using Linux’s popular Hyperledger Fabric. Enterprise blockchain solutions are yet to reach widespread adoption, but nonetheless boast some clear benefits, demonstrated by use cases in the financial and supply chain spheres:
- Supply chain benefits: If you read the spiel of any product hoping to sell their supply chain solution, you will come across the words “visibility” and “efficiency”. Here will be no exception, as enterprise blockchains guarantee transparency of data (for the people with the right permissions), an automated (and thus sped up) customer onboarding, and a record of every stage of the supply chain, to ensure accountability and responsibility.
- Financial benefits: Our globalized world means a great movement of people and resources across borders. The legal flow of money traditionally requires certain authentications, sign-offs and centralized processes not fit for the modern age. With enterprise blockchain smart contracts on scalable systems can be used to automatically reconcile a request. For example, Ethereum 2.0, with enhanced scalability, claims to be able to quadruple visas capacity of 24,000 transactions per second. In addition, middlemen and their associated fees can be cut out and greater connectivity can be facilitated throughout the globe.
While these two areas offer the clearest examples of how enterprise blockchain can improve a company’s processes, it is obvious that any industry relying on the efficient flow of data and its verification between multiple parties can be assisted by an enterprise blockchain.
Why does your business need blockchain technology?
As shown above, established companies like IBM, Deloitte, R3, along with many blockchain startups are developing services to automate or promote transparency in the operations of organizations around the world. There are a few simple questions you can ask yourself to see whether blockchain for your enterprise can be considered:
- Is your data dynamic with an auditable history?
- Does the data need to be controlled by a centralized authority?
- Can some multi-step workflow processes be feasibly optimized by a multi-step technical solution?
- Is there sizeable human error in my company’s operations that needs to be reduced?
As you can see, these are some involved questions that require serious reflection; however, for big businesses with paper trails that run through multiple parties, there is definitely a strong case for considering an enterprise blockchain solution.
What is the greatest barrier to further adoption of blockchain solutions?
The World Economic Forum estimates that 10% of global GDP will be registered on blockchain systems by 2025. This sounds impressive, but there are still a few barriers to overcome, mostly in the areas of regulation, common standards and compliance.
As we make our way through 2021, the biggest issue is still trust. Understandably, people are sceptical about trying new systems with foreign and hard-to-comprehend language. Furthermore, the connection with cryptocurrencies, a byword for volatility, do little to help the case.
On the other hand but similarly damaging, were the companies intially jumping on the bandwagon when blockchain came to prominence in 2017, expecting a panacea for all their business woes. Three years ago, it was enough for a company to put the word “blockchain” at the forefront of their operations and have businesses clamouring for their services. Businesses that were let down by their own unrealistic expectations projected their disillusionment onto blockchain itself, engendering distrust in their professional community.
In 2021, things are more balanced. There is less scepticism, but people want to see a roadmap and clear value down the line from their enterprise blockchain solutions. This is where reputable companies are able to come in and finally start delivering robust and trustworthy products. This leads us to where we are now, enterprise blockchain trends for the coming year.
Enterprise blockchain market trends for 2021
2021 is an exciting time for the blockchain market, with lots of shifts presenting new opportunities for innovators and customers alike. Here are just some of the new solutions that are on our radar:
Hybrid blockchain solutions – While we have talked about lack of trust, hybrid blockchain solutions are best positioned to counter some of the fear that exists when using new technology. Martha Bennett, Principal Analyst at Forrester, mentions that successful companies are using blockchain as part of a wider technology stack. With blockchain as a mix of proven techologies rather being used as a standalone solution, it engenders more trust among clients.
Blockchain for specific problems – Enterprise blockchain solutions that spread themselves too thin tend aren’t able to properly articulate their value for clients. Conversely, blockchain solutions that corner one specific market segment have a better chance of thriving.
Private/ public blockchain hybrids – While permissioned private blockchains are the current choice for enterprises, public blockchains with a roadmap in the system are able to show future scalability. The introduction and adoption of Ethereum 2.0 in 2021 is the best challenge yet to the private blockchains, with decentralization, scalability and security, which was previously a concern for companies adopting blockchain solutions. Ethereum 2.0 introduces a safer Proof of Stake (POS) model, replacing Proof of Work (POW), and promises 100,000 transactions a second, 4 times the speed of visa. While the technology matures, utilizing a part public, part private blockchain hybrid is a viable option for enterprises.
Other notable market predictions include blockchain adoption acceleration due to Covid-19, China incorporating blockchain into their national digital infrastructure, and the continued steady ascent of DeFi.
Now that we have a pretty good idea of what we are likely to see in 2021, there is only one thing left to ask; what are the big players doing on the blockchain front?
Google’s blockchain foray
While Google doesn’t at present provide enterprise blockchain solutions, it last year teamed up with the blockchain company Theta Labs, a venture-backed company that delivers video content through decentralized servers. Google Cloud operates a Europe-wide validator for the Theta network, thus firmly demonstrating their support for the industry.
JP Morgan’s blockchain plans
JP Morgan has already proven its credentials with its enterprise blockchain solution, Quorum, which was acquired by Brooklyn-based company ConsenSys in 2020. While this could be interpreted as a move away from blockchain solutions, in recent days, the company has posted 34 job openings related to blockchain, mostly to do with the Onyx division, created to oversee the bank’s payments token, JPM coin.
Amazon Managed Blockchain supports Ethereum
Having established itself as a strong player in the enterprise blockchain sphere, AWS has recently announced that clients are able to provision Ethereum nodes. Now, enterprises that use Amazon Managed Blockchain can leverage Ethereum and Hyperledger open-source frameworks.
The final word
With new solutions appearing every day, providing real benefits to companies around the world. Enterprise blockchain is just getting started. Despite some challenges to overcome, 2021 promises to be an exciting year, especially with the implementation of Ethereum 2.0 and the moves big companies are making to promote their blockchain services. One company with a proven track record of delivering customized and advanced blockchain solutions is INC4. Contact a representative today to see how they can boost your business and read their report on the current state of blockchain moving into 2021.