What on earth is a blockchain?

​What is blockchain?
Blockchain is an emerging digital business technology with the potential to bring about step-function improvements in efficiency and security to several industries. Blockchain could be one of the most disruptive innovations since the advent of the internet.
 
How does it work?
It is a cryptographic or encoded distributed ledger, comprising a digital log of transactions that is shared across a public or private network. It is a technology that brings substantial benefits in terms of speed, security, convenience and costs.
 
It is a database well suited for applications requiring a rapid, permanent time and date stamp such as: payments, financial asset transfers, smart contracts, third-party marketing reporting, ownership splits and notary services.  Blockchain technology is applicable across multiple use case categories, as a static store of secure information or dynamic store of “tradeable” information.
 
What type of industry engagement are we seeing?
We are seeing a few types of early engagements: blockchain accelerator programs/ hackathons/ position papers, partnering in a consortium to design blockchain solutions (mainly Hyperledger Fabric and Ethereum projects), venture capital funds/ equity stakes (mainly big banks), internal pilots (I have been approached to join a few projects) and financial technology labs.
 
What is the focus?
The needs addressed by Blockchain are: record keeping (static registry, identity and smart contracts) and transactions (dynamic registry, payments infrastructure and verifiable data). Emerging use cases exist across multiple industries with a primary focus in financial services and cost reduction.
 
Who are the early investors?
Investment in blockchain is gaining momentum ($2Bn+ of Venture Capital investment over the last 3 years) and is expected to grow rapidly; the banking and financial industry are expected to be the major key players in this space. The success of these investments is highly dependent on the collaboration in an emerging eco-system primarily driven by innovation in the Insurtech and fintech industry.
 
What it is happening?
Most organisations are in the early stages of experimentation; most senior executives expect to see material impact from this technology only in 5+ years. Most of the impact from blockchain in financial services is likely to come from payments, and capital markets. Preliminary sizing of 4 use cases suggest significant value creation.
 
 What are the requirements?
Enabling collaboration, shaping a positive regulatory environment and identifying clear business cases justifying the transition costs will pose the biggest challenges to implementation. Organisations can unlock the value of blockchain through a deliberate five-step journey: Education, Strategy, Solution design, Implementation, and Approach.