At startup events and workshops, the question we at the IBM Global Entrepreneur Program (GEP) are being asked more and more is, “Do you have blockchain?” There’s a good reason for that question: “blockchain” is the new buzzword in the technology scene. Blockchain is going to revolutionize entire industries, along with our very conception of trade and transactions.
Startups who come to our booth at events not knowing exactly what they want get an overview of IBM Cloud and its capabilities. The ones who come knowing exactly what they want are usually split between those who want cognitive services, servers, databases, and those who want blockchain. This increasing interest in the hot new up-and-coming technology is a chance not only to attract more startups to the GEP, but also to educate entrepreneurs on the incredible potential of blockchain for their businesses.
Startups and developers who don’t yet know about blockchain can benefit from an explanation of the technology and a few examples of its uses. So, for anyone who’s going to be explaining blockchain, here are the points which I think will give your potential GEP startups — and for that matter, any startup — a good grasp of the basic concepts.
First, blockchain is a technology that has been around since 2009, when the anonymous person or group known as “Satoshi Nakamoto” conceptualized and implemented blockchain as a core component of Bitcoin. Bitcoin, obviously, is the most famous example of blockchain technology, but it’s far from the only application. Since then, as shown in the Google Trends graphs below, interest in the technology has grown exponentially, and is predicted to continue to grow in the same way. I think it’s important that startups know that the interest in this technology is rising, as it may give them the push to delve into the technology now to ensure that they stay ahead of the curve.
So, what exactly is blockchain technology? It’s a distributed, append-only, immutable ledger, which simply means that it is a ledger that exists on a local or global network, that is stored on all the computers of that network (distributed), and can only be added to (append only), not changed or edited retroactively (immutable). All the computers on the network have an updated copy of that ledger, and it can only be appended with a consensus according to the blockchain protocol. Since the ledger is distributed, this increases the security and trust of the system because the control is with the many, not with the few — it’s a peer-to-peer network, not client-server. The purpose of this technology is to enable trade between people and entities directly by cutting out the middle man, such as institutions and banks. This trade activity is enabled by the trust that is inherent to the blockchain protocol.
The reason blockchain is important is that, within the next decade, it will have revolutionized the way we deal with money, and the way we trade. Blockchain eliminates the need for a trusted third party to negotiate or moderate transactions; they can now happen peer-to-peer. For example, musicians could post their songs on a blockchain application and specify how they want their song to be used, making it free to the public directly, without a large corporation eating up their revenue. Or, a person could transfer money from their “account” to their friend’s without having to go through a bank. The World Economic Forum predicted that by 2025, 10% of global GDP will be stored in blockchain technology, according to a report published in September 2015.
There are endless possibilities and applications for this new disruptive technology, and they’ll gradually become more and more popular as more people grasp the revolutionary idea of blockchain.
It’s a good idea to give startups a few examples of their peers who are currently using blockchain so they can see how it’s being used and, more importantly, to show them that blockchain is not limited to purely financial applications. It can be hard to conceptualize all the possible uses for blockchain, so a few examples will help get the ball rolling.
Here are a few startups I’ve found that are doing great work with blockchain. Pick the examples that you think would be most engaging for your startups.
- ShipChain: Shipping and logistics
ShipChain helps you track your order/package through the whole process of transportation using blockchain, from the moment it leaves the vendor to the moment it arrives on your doorstep.
- Thrive: Marketing
Thrive is a “decentralized advertising marketplace” that uses blockchain to create a secure and reliable platform where users can buy and sell advertisement space.
- Loci: Intellectual property
Loci aims to offer a better and more streamlined way for inventors to monetize their ideas. Using its native tokens — LOCIcoins — users can tokenize their patented ideas for sale in the global market.
- ConnectJob: Online jobs marketplace
The services market has a huge opportunity for applications that connect certified workers to customers. ConnectJob aims to do that with the help of blockchain, benefiting both the workers and the customers.
- Odem: Online higher education
Odem uses blockchain to connect students and professors to each other, while cutting out the expensive middleman that is university. Students and professors can interact directly and securely using smart contracts, and qualifications will be guaranteed.
- GUTS: Online ticketing system
GUTS is a blockchain-based ticketing system that aims to stop illegal reselling and price markups of tickets. It grants you ownership of your SMARTticket on your phone and allows you to resell it, but not for a markup.
- AidCoin: Fundraising platform
AidCoin uses blockchain to ensure that donations to charities and organizations are used in the correct way and spent correctly. It does this using blockchain, cryptocurrencies, and smart contracts.
As you can see, there are all kinds of interesting applications for blockchain that might intrigue startups. If you’re working with a startup that’s interested in learning more — or if you’re part of one — I recommend our Blockchain Essentials course on developerWorks. It gives an overview and explanation of the technology, and the lab in particular is useful in demystifying the use of blockchain in applications.
So, startups, it’s time to take the plunge: a front-end blockchain application is just like any other — you don’t need to worry about the details, you just need to understand the benefits and possibilities!