Besides powering crypto currencies like Bitcoin, Blockchain has the power to be transformative at all levels of corporate strategy. We caught up with Beverly Macy, educator at the UCLA Anderson School Of Management and part of the UCLA blockchain lab.
From financial services to manufacturing, blockchain seems to have the potential to impact many industries. I think many people do not really understand it beyond having something to do with Bitcoin. How would you explain it?
A blockchain is the technology that underlies cryptocurrencies like Bitcoin. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using a series of hash codes to keep them encrpyted. That may sound a bit dull, but the transparent way in which these blocks and chains are created, verified, stored is what is brand new.
While currencies like bitcoin have gotten all the attention, in actual fact companies like UPS, Shell Oil, IBM, NASA and many more are taking a serious look into how blockchain applications can be utilized in their industries. Many hundreds of millions of dollars are already being deployed from companies in logistics to understand how to make transactions more efficient and reduce payment disputes. Walmart and IBM are looking at how blockchain can aid in food safety.
These types of non-financial applications where blockchain technology could be deployed will most likely benefit the most in the long run.
Literally anything that requires a record – asset management, real estate transactions, voting records, music and other IP royalities, healthcare, insurance, banking, shippiing and distribution logistics, all could benefit from blockchain technology. The exponential ramifications are truly mind-boggling.
Are there potential uses of Blockchain as it applies to marketing?
Because blockchain is a distributed ledger that creates permanent, transparent records we can foresee all types of uses. Anything that requires a record can be transformed. So things like verifying ad delivery – did a real person see the ad; storing digital assets (alternative to cloud hosting), preventing ads from being overserved; compensating publishers, tech companies, agencies, contractors, and others for the creation, delivery, or performance of the ad; vet and authenticate every contract – all can be based on blockchain.
Additionally, marketers will be able to embed a “brand story” into the product itself. For example, if someone is buying a used car or a house, they may be able to embed history into the transaction through blockchain. Imagine buying a house and have absolute certainty on repair and enhancement history.
We here at EquiBrand divide up the world into “upstream” marketing activities (high level strategy) vs. downstream activities (tactical). Does blockchain technology have the potential to be truly transformative at the upstream level? If so, how?
Yes this has the potential to be truly transformative at the upstream level. As more marketing today is digital marketing we can and will see blockchain have an increasing affect. It may not be perceptible in the short run but it will make a huge difference. Because blockchain is so relatively new we don’t know exactly where the impact will be the greatest. Presently, educating customers and clients about blockchain and what is could mean for their business is what is needed.
Think of the early days of the Internet. The parallels are enormous. In 1995 when Netscape was announced (the first Internet browser), the market didn’t even have language to describe what was happening. Everyone asked, “Who owns the Internet?”; “How does it really work?”; “How (or will) it affect my business?”. That is very similar to what we hear around blockchain. The transformative opportunities will emerge as the technology is more widely adopted.
So a blockchain has immense upstream marketing implications as it removes barriers and solves problems that entire organizations grapple with. But is a blockchain something smaller enterprises can leverage or is this exclusive to larger organizations at this point? How would an organization go about implementing a blockchain strategy?
One of the most impactful uses of blockchain technology will be the smart contract. Smart contracts are self-automated computer programs that carry out the terms of any contract.
Smart contracts run as programmed and accrue no downtime, censorship, fraud or third-party interference and cannot be broken by either party. Think of altering of a will without a third-party intermediary.
The company Synaps is already using blockchain smart contracts to improve the syndicated loan market.
It’s interesting that some of the same questions arose in the early days of the Internet conversations apply here. Was the Internet something smaller enterprises could leverage in the early days? Absolutely. By 2000 a company had to have a web address. That especially applied to smaller companies. This will be very much the same. As the use cases grow and the benefits are realized, the market will adapt at all levels.
Beverly Macy is an author, educator, and thought-leader in emerging technology and digital media. She teaches the Business of Media, Entertainment, & Sports at UCLA Anderson’s Center for MEMES and is a member of the UCLA Blockchain Lab. You can reach her at email@example.com