Blockchain technology is set to be a major player of the future digital economy, but many business leaders remain unsure what that means for their companies going forward. In a Deloitte survey of 308 senior executives at large U.S. companies, 39% of respondents had little or no knowledge about blockchain technology. A survey of more than 200 board-level, non-IT executives in the U.K. yielded similar results: About 40% said they do not fully understand the technology, and less than 10% believe their organizations have the necessary skill sets to adopt it.
To start by unpacking what blockchain really means, let’s refer to HubSpot’s approachable definition: Blockchain is “a record-keeping technology that is nearly impossible to tamper with. That’s because a blockchain’s records, or ‘ledger,’ is hosted by everyone in the network and openly available to everyone in the network, like a public spreadsheet that they add to but can never edit or delete.”
But where should business leaders go from there? How can they determine best practices for utilizing the decentralized web and make blockchain technology a useful part of their business strategy? My organization has found it useful to focus on the following three questions. These offer particular benefits for platform businesses, which will need to address weakening network effects as they lose ownership of participants’ data.
1. What value will we offer? This first question gets at the paradigm shift the decentralized web presents. The advent of blockchain isn’t just about new ways of operating. It forces many businesses — platforms in particular — to take a fresh look at why they exist.
Consider, for example, eBay, Uber, and Airbnb. Throughout the era of TCP/IP (the web protocol that computers use to talk to each other), these platforms have acted largely as centralized repositories of information. You want to buy a product, they know who has it for sale. You need a ride, they know who can give you one. You need a place to stay, they know who has an extra bedroom to rent.
But as blockchains become more common, this kind of information will become publicly available and searchable.