Blockchain's 'new cloud' pushes diverse payment options
Enterprises all over the world are leaning into blockchain technology as a way to gain competitive advantage. Blockchain offers several advantages to enterprise systems, and organizations that tap into these advantages now as early adopters are better positioned to emerge as future industry leaders.
Coinbase—a popular U.S. bitcoin exchange—just announced that customers can make instant withdrawals through PayPal. But payments aren’t the only use case that ledger technology is unearthing for enterprises. Companies like HP Enterprise, SAP and Amazon have all rolled out blockchain platforms that allow customers to do just about anything.
Large companies’ current interest in blockchain is a promising indication of its role in future enterprise technology. But, what exactly does blockchain mean for businesses? Blockchain is essentially a new form of digital trust.
Blockchain is a solution to social trust that removes the need for centralized institutions—banks, governments, medical facilities, for example—to record and verify transactions. Finally, blockchain technology relies on modern digital processes that use cryptographic proof to validate transactions, making third-party encryption and security unnecessary.
By discussing the impact of what we may refer to as “Cloud 1.0 vs Cloud 2.0,” we can look at how blockchain already impacts some huge companies and how they’ve evolved their approach to using blockchain to build social trust. In the current Cloud 1.0 era, companies such as Google, Facebook, Amazon and Apple oversee data transmission and keep records on their servers. As digital consumers, we place an immense amount of trust in these companies for securing our emails, personal data, internet searches and content.
With Cloud 2.0, however, some of the burden of trust shifts. Blockchain reclaims proof of trust and allows users to reassign the data management role to a decentralized network guided by autonomous and immutable code. With blockchain, software becomes more secure and efficient. Perhaps most important, with Cloud 2.0 and blockchain, software becomes more prescriptive: for example, rather than trusting Google or Apple to manage and monitor access to their data, consumers can instead trust that the blockchain ledger will provide a reliable record of what specific data is shared with which specific people. That’s a crucial piece of how blockchain will help the new cloud iterations to become more bulletproof in terms of recording data transactions.
In this new Cloud 2.0 universe, where the burden of security falls on the blockchain model rather than individual actors, blockchain also promises a number of corollary benefits to enterprises.
Expedited workflows: Blockchain removes third-party transaction managers and replaces them with a more autonomous system. This blockchain-based exchange should offer time-saving benefits, as logs and ledgers that require third-party review and approval weigh down various processes. Automatically reviewing and approving transactions with a secure and immutable network should expedite workflows.
Cost: Most transactional mediums owned by private vendors, and they often add fees and other costs. Cutting out third-party middlemen while continuing to process transactions or complete tasks automatically should save money.
Transparency and security: Digital assets are all immutably branded within the blockchain so that transactions are irrefutable and irreversible. For example, you can use the blockchain to store important information that different people must rely on, such as the source and processing stages of food products, and then go back to see exactly who made what changes from any time.