Blockchain Ecosystems: Compliance and Governance
The blockchain can be used for far more applications than for cryptocurrencies. With the help of a blockchain, processes between private, corporate and public actors can be documented and authenticated. What's more, blockchain is able to create new standards across the entire social value chain. This is because transactions are stored digitally and in a tamper-proof manner in the order in which they were created. Where is the blockchain heading? What new opportunities does it offer society?
Blockchain creates trust for the digital age
Blockchain offers potential for many industries. Middlemen are becoming obsolete, routes are shortened, and costs and an extremely large amount of time are saved. Buyers and sellers act in confidence on the basis of unalterable digital contract terms. The way of doing business is becoming freer and more flexible. This may have the appearance of a “digital revolution.” However, a basic framework must be developed beforehand. In fact, there is currently no standard and there is a lack of regulatory requirements from the legislator. The technology is suitable for the mass market when it is convenient to use. In addition, success is also due to the perfect use case for exploiting the benefits of DLT technology. Not every use case is suitable to be implemented using blockchain. However, the potential is enormous!
The blockchain as an infrastructure for recording secure transactions is able to solve existential problems of the Internet. A current problem is the arbitrary copyability of data, which can lead to a loss of value or even a loss of trust. It starts with music tracks, books and images and doesn't end with high-quality, extensively programmed software. Digital content can be reproduced at virtually no cost. What is original and what is copy? What is the value of digital content whose origin is incomprehensible? If information for creating digital content is stored together with it on a blockchain, it is possible to answer unequivocally what is original and what is a copy. Losses in trust and value are minimized, if not eliminated.
Blockchain and the Internet of Values
The information available has been growing exponentially since the establishment of the Internet. Blockchain technology provides the appropriate infrastructure to implement the exchange of values. In this way, the Internet is made suitable for maintaining real value by using the blockchain to control, distribute and organize various resources without the need for intermediaries. Applications are being created in the logistics sector that are becoming more transparent and easier to handle thanks to a blockchain. Ecosystems can be managed decentrally, which can result in the conservation of raw materials, energy and time. Blockchain supports the digitization of processes in the supply industry, retail, production and in many other areas of society. It could also be used sensibly in education, for social projects, in medicine and in research. A variety of specific applications in numerous areas such as property documents, accounts, insurance, licenses, digital medical records or ID cards are conceivable.
Machine-to-machine communication plays a major role in the so-called Internet of Things. Without human influence, it is left to machines to issue certain commands and carry out activities. Sensors take control, monitor limits, use motors or transmit data to other sensors.
In manufacturing, for example, a sensor is used to check the wear of a component. If this sensor detects that the component needs to be replaced, a replacement is ordered fully automatically from the supplier and, at the same time, a fitter is booked for the delivery period. Only when the sensor reports that the spare part is completely renewed and ready for use in order to continue working will the bill also be paid. Production set-up times can be minimized. Recurring tasks have the potential to digitize and automate them. The blockchain can be used to conclude contracts that contain liabilities and specific agreements or regulate deadlines.
Outlook: Using open, networked ecosystems in society
The future of society is conceivable as a network of networked, open ecosystems through blockchain. The concepts for “Mobility as a Service (MaaS)” and “Smart Cities” provide good examples of this. When using MaaS, resources are made available for temporary mobility. Projects such as car sharing, bike sharing or sharing e-scooters are well known. The MaaS system is closely linked to the idea of smart cities.
So far, open blockchain ecosystems have been characterized by pseudonymization. They work in a random interaction that depends on the current market with its availability and needs. Innovative effects can be achieved here through targeted control. Governance implements individually defined guidelines that regulate the exchange and consumption of content secured via the blockchain. This includes setting goals — for example optimal utilization of drivers and vehicles at a logistics company —, the selection of methods and the allocation of available resources. The application of blockchain technology supports active compliance. It is becoming easier to comply with internal and external standards. Laws, regulations and industry standards can be securely and traceably integrated into processes.
