Decoding Blockchain’s potential for brands
Blockchain will transform your brand, no matter your industry. Technology and finance visionaries have evangelized the technology’s potential for years. The Blockchain revolution finally appears imminent, however, and its ramifications even broader than predicted.
Similar to the internet’s proliferation of information access and transfer, Blockchain will accelerate and facilitate value transfer and exchange. Extraordinary opportunities lie ahead, but only for brands savvy enough to anticipate and navigate coming advances.
To begin, what is Blockchain? It’s not Bitcoin, Blockchain’s first large-scale application. Rather, it’s Blockchain’s underlying technology that’s the true innovation. Blockchain’s fundamental blueprint was outlined in a 2008 white paper by Satoshi Nakamoto (a pseudonym yet to be unmasked).
The paper defines Blockchain as a distributed ledger which:
This combination of independent and interdependent authentication eradicates fraud. Whereas existing marketplaces require outside parties to establish trust, the basis for trust is inherent in Blockchain’s system itself. Blockchain’s applications and implications, therefore, stretch far beyond currencies, potentially impacting global trade, securities, and insurance markets, to name a few. Even regulators are embracing it to improve compliance and tax collection.
What branding implications does wide-scale application of Blockchain pose for different industries? For generations, big financial institutions’ competitive advantage was their very institutional status. Big buildings, armies of suits, slick corporate sheen, a lexicon designed to keep laymen guessing. These elements were all calculated to reinforce bank’s biggest intangible assets – trust and authority.
Blockchain was first proposed just as the financial crisis began eroding trust in banks as reliable mediators. Instead of denying Blockchain’s viability, financial powerhouses are embracing it openly and actively road-mapping its future.
The R3 Consortium is the most visible amongst many such prescient actions, representing an ever-growing group of namebrand institutions facilitating Blockchain-based innovations.
For example, Deloitte recently spearheaded creation of a Blockchain-based bank and IBM is throwing substantial clout behind a whole host of sophisticated business solutions leveraging this nascent technology. Blockchain has also inspired irrational exuberance, such as Accenture’s “editable” version, which appears to miss the point of the technology for the sake of appeasing skittish Wall Street execs.
Promising Blockchain innovation is already beginning to spill beyond finance. Vienna-based Grid Singularity is exploring a decentralized electric grid built atop Blockchain, allowing individuals to buy and sell energy enabling integration of smaller, scattered renewables such as wind and solar into the energy system.
Blockchain is also promising to democratize and demystify the recording industry’s broken royalty system. Grammy-winner, Imogen Heap’s latest release was launched as a Blockchain application, directly linking DRM, streaming and reimbursement to the music itself. Similar novel ideas will continue affecting increasingly diverse industries in unpredictable but profound ways.
Embracing innovation effectively requires understanding new rules, estimating their impact on current strategies and then deliberately seeking gaps between present strengths and future opportunities that provide optimal leverage.
Uber and AirBnB upended their respective verticals by allowing direct connection within transactions traditionally brokered by middlemen. Netflix’s insight was seeing past the need for costly transportation and inventory and realizing shipping physical discs was a needless extra step towards delivering actual value.
Amazon’s success similarly came from appreciating the power of unlimited shelf space and robust search had to provide a massive audience a staggering number of options. (The established competition of these innovators—Blockbuster and Barnes & Noble, respectively—were hopelessly blindsided by these changing realities.)
Blockchain currently places myriad brands at an identical, existential crossroads. Outsized rewards await organizations that are capable of reframing their current business models to capitalize on the new efficiencies and realities Blockchain presents.
Conversely, there is equal risk your competition will get there first. Brands with a deep understanding of their core fundamentals will be better poised to identify and integrate such opportunities. Inspiring corporate reinventions like Marvel, Lego and Polaroid prove that brands with defined identityhave a fixed vantage point to align their perspective with new technology.
Imagine your current business with all transaction intermediaries removed. Which of your offerings would be made redundant? What new value could you provide? Would these changes gut your brand? To best address these pressing questions, avoid the temptation to look to new technologies for the solution. First, redouble energy and attention around hyper-focusing your brand’s promise and branded customer experiences.
Once you clarify your brand’s perspective, you will be able to chart a course to navigate this ever-shifting landscape with confidence. Only your brand’s depth of foresight, purpose and reputation will determine if the coming Blockchain wave will strengthen your connection to customers or expose your business’s weakest links.
Andrea Katz is founder and Chief Ideonista at Ideon.