The Enterprise Ecosystem and Blockchain: An Overview

The cryptocurrency movement continues to show no signs of slowing down. With Bitcoin’s price trading ~$10,000 at the time of writing and more consumers being onboarded to the ecosystem, the numbers of cryptocurrency users are growing well into the millions. Much of the consumer adoption is thanks to user-friendly wallet applications and exchanges like Coinbase, Kraken, Exodus, BRD, and many others. 

Unsurprisingly, consumer adoption in the crypto space is sparking the interest of the enterprise ecosystem. 90% of banks are currently exploring the use of blockchain technology in payments and “are actively investigating various use cases to determine how they can use blockchain to achieve cost benefits and drive new revenue,” cited from an Accenture study.

Unlike consumer adoption, which is a fairly straightforward concept, there is lots of confusion around what enterprise adoption means and looks like. In this piece, I will break down what enterprise adoption looks like today and some of the large early players in the scene already. 

Enterprise Blockchain Adoption Defined

Enterprise blockchain adoption is a broad concept that leaves most people scratching their heads. And rightfully so. What does that really mean? 

Blockchain adoption in the enterprise world has two basic forms:

1. Private (sometimes called permissioned) Blockchains
2. Public Blockchains

Please note that public blockchains can be permissioned as well, but for simplicity purposes, I am going to explain permissioned as being almost synonymous with private chains. Let’s first break down private blockchains.

Private Blockchains Explained

Private, or permissioned blockchains, are blockchains used by large enterprises to more efficiently manage operations, typically related to supply chain management, logistics, and often times coupled with IoT.

Unlike public ledgers like Bitcoin, these private chains have permissioned access by only the company(s) that require access to the data on the blockchain. 

A current real-world example is GE Aviation’s Digital Group streamlining the tracking of aircraft parts using blockchain technology. This is thanks to Microsoft Azure’s Blockchain Technology group for providing the proper tools and expertise.

Using their blockchain data services, GE can track the lifecycle of different aircraft parts, streamline documentation, and better calculate any inefficiencies in the pipeline. 

Retailer Cloudburst is also taking advantage of IoT and blockchain to streamline operations and customer support, with help from Microsoft Azure. Thanks to the combination of IoT and blockchain, Cloudburst can keep up with the status of each piece of clothing from production to sales to recycling.

Microsoft, IBM, and other large technology companies are dipping their toes further and further into the blockchain ecosystem. These types of firms are becoming experts in technologies like Hyperledger, R3 Corda, and Ethereum to build out these private blockchains for large enterprises. Ethereum is a public chain, but private chains can be built on top of it.  

Another use-case that these firms are looking to build is consortium chains. A consortium chain is a large enterprise chain that is shared between enterprises to make sharing data more efficient. In the banking and advertising sectors, sharing data is of utmost importance and if there are inefficiencies in sharing incorrect or untimely data, then there can be huge losses.

Blockchain is a reliable ledger that updates in unison across nodes, so building out consortium chains is a major effort taking place that can improve efficiency.

Companies can also build consortium chains to share development costs and time by sharing networks, but still making their data private for themselves. Note that there may also be instances where some chain data is public for anyone to view, while other aspects of the ledger are private. In general, these are still referred to as private chains.  As one can imagine, this is a multi-billionaire industry that is just getting started. 

Public Blockchains

Then, there are the public chains that are more obvious to many familiar with the space. Think Bitcoin, Ethereum, ERC20 tokens, Litecoin, Monero, Ripple, and many others.

These networks are open, allowing anyone to participate and view activity. While these networks, particularly Bitcoin, have a long history of working efficiently, they are not easily integrated by enterprises. 

Obtaining reliable chain data requires running your own node, cleaning up the data, and making a robust API for you to use, for each network. This is a task that many banks, financial services firms, and other companies simply don’t have the time or expertise to handle.

Despite this, banks and financial services in particular, want to allow their clients to custody crypto assets, but it’s difficult to build out a reliable multi-chain service and custody solution. 

While Microsoft, IBM, Amazon, and others focus on the private chain side of the industry, there are some companies making big waves on the public side - enabling large enterprises to interact with public chains. There are fewer companies focusing on the enterprise space, but plenty focusing on the developer community.

Amberdata is one gaining traction on the developer side, offering different tiers of service to access their data streams. This will enable innovation to continue on the ground level with consumer applications and more DeFi fintech to prosper with a low barrier to entry.

One notable project gaining steam on the enterprise side as of recent is Blockset, which launched just a couple of months ago. The interesting focus of Blockset is that they are targeting the enterprises of the world, noting that they have, “over 20 financial titans currently evaluating Blockset in a private pre-release program, including SBI Holdings, PayPal, KPMG, and Ripple’s developer initiative, Xpring.” 

The Takeaway

In summary, enterprise adoption is just starting to lift off. Between Microsoft Azure building private chains and Blockset working to ease the public chain integrations, this is just the beginning of what I see as a new wave of enterprise and broader consumer adoption for the crypto world. Coming off the back of a three-year bear market, this is great to see, especially for those who may be jaded.

Moving forward, I expect to see more:
1. Banks and financial services adopting custody of the public chain assets
2. Consortium chains between enterprises adopt blockchain technology
3. Large companies create private blockchains to better manage supply chain efforts, IoT activity and digitize legal or other important documents

**Here are some other interesting articles that I wrote:
Things We've Learned From Working With More Than 50 Blockchain Companies
Hacking Your Marketing Campaigns With Data Science
The Rise Of Zero-Trust Architecture
Blockchain Product Marketing Vs Digital Marketing: What's The Difference?

(Disclaimer: The author does not have a vested interest in the projects mentioned)