Blockchain has become synonymous with Bitcoin. Bitcoin is better known for being the currency of choice that ransomware attackers use to extort their victims. But the underpinning technology that makes this digital currency viable, a Blockchain, is far more than just a tool for the finance industry or a way of creating digital currencies.
Blockchain technology, or a future derivative of it, must rank as one of the most important technologies in underpinning our new digital world, but we will likely look back in 10 years’ time and not think of blockchains as transforming the finance industry, but, enabling the way every digital system maintains and exchanges trust in industries as diverse as healthcare to industrial maintenance, managed services providers and airline tickets.
The issue we have in the digital world is summed up in one word – and that word is Trust.
Not just the trust that is lacking in how companies and government handle our personal data; and of course GDPR (General Data Protection Legislation) is coming in in 2018 to begin the process of shifting the emphasis of ownership of personal data from those collecting it to those who the data refers to, but the trust that as we move to more digital systems and greater levels of automation, that what was promised to be done was done and is verifiable in a transparent way that takes trust and puts it beyond doubt. And something that turns a contract into more than a piece of paper that is enforced not because somebody was eagle-eyed to spot when it is broken but a living and automatically and transparently managed agreement.
There are so many examples of why we need a technology such as blockchain to exist that my brain keeps rattling up another one on a daily basis.
So, let me give you two of my favourite examples, and let’s start with the IT Outsourcing and Managed Service markets.
Now the concept of managed services is that Company A gives Company B the responsibility, and a payment, to operate something on its behalf. A powerful yet simple example is that Company B signs a contract to say it will manage the PC/Laptop/Device estate of Company A.
That involves provisioning new devices, handling calls of end users when things go wrong, and normally updating those machines with patches when they are either needed or mandated by the manufacturer. That contract is today in most parts based on trust – we will do X on an interval of Y.
The X and Y are written into a contract and there is usually a Service Level Agreement clause governed by a Service Level Agreement and financially covered by a Service Credit regime if activities don’t happen as agreed. Most of this is driven by reports and a good level of trust.
But, here is a question – if a tree falls over in am empty forest, does it make a sound?
If Company B is contracted to doing something, and they fail to do it, but the consequences of that failure are only visible when something catastrophic happens (we were patching 2 days slower than we said, but it was only when the ransomware attack hit us that you noticed) then the contract is simply providing written evidence of a failure everybody knows has happened. The service credit is an admission of failure but when the post mortem happens in many cases the failure was a build of up things that were done incorrectly or not done at all. Everybody says they will learn from their mistakes and wait for the next time it happens.
So, how many companies monitor their managed services provider?
How many companies have access to the real-time activity their managed services provider are contracted to do?
The answer – virtually none – because that data is held in systems within the managed services providers environment, and that data is usually only ever accessed when something goes wrong.
What if every activity that any MSP ever does could be published and analysed by the customer receiving the service, and that real-time telemetry of a contract could be used to ensure the service delivered is always within the agreed tolerances.
Totally transparent to both parties.
What if that ledger could determine pricing and service credits automatically – in real time.
That is the real potential of the blockchain. Contracts that means something. Contracts that can be monitored through transparency of verifiable actions.
In the future, there will be no good reason why every action committed to by any organisation cannot be securely recorded in a blockchain ledger for another party to verify.
In a world driven by open and transparent blockchains the concept of trust is superseded by one of verifiable records of something having been done.
And here is my big one – there is NO REASON whatsoever that a compensation industry should have built up around delayed flights. If airlines wanted to live up to their contract, and move beyond trust between themselves and their passengers, they could do so overnight.
When I pay for my airline ticket with my credit card and the flight does not take off on time a refund could be made to my account automatically based on verifiable data from the contract the airline made with me and the departure of their aircraft.
When I book, PayPal could send my confirmed payment data to an airline industry blockchain platform. The airline could then verify the exact departure time of my flight and send that data to the platform, and create a verifiable contract between my payment and my flight.
The blockchain platform now monitors the flight departure times and as delays occur it automatically credits customers’ accounts based directly on consumer legislation in the US, Europe or elsewhere. Airlines will have pre-authorised the payment of refunds based on the platform because a) they want to honour their legal obligations, b) they want to create trust in the consumer, and c) they don’t want to fuel a costly compensation system that costs them and their customers money.
Now of course I don’t think any airline is going to be beating its way to my door any time soon to pay for the idea, but there is genuinely no good reason why an Airline Claims Industry is springing up today. And blockchain makes that possible.
So, watch out industries who say they want to stand by their contract – because with blockchain we can link promises in contracts and proof of performance to payments – it’s just I am not sure many industries relish the thought.