Blockchain: the technology set to change customer communications?
Blockchain. Everyone’s talking about it. Buy why? And how could blockchain impact customer communications?
Before we consider how blockchain could be useful for customer communications, security or financial applications, let’s explore what it is.
What is blockchain?
Blockchain is a technology that relies on a shared database (or ledger) to prevent fraud and guarantee validity. This contrasts with traditional transactions, which are recorded by individual organisations or businesses. With blockchain, multiple parties maintain copies of the same ledger.
No individual can manipulate blockchain records, because the difference would be discovered and corrected. The only way to defraud a blockchain (hypothetically) is to change every single instance of a transaction in every node of the blockchain. This is impossible, because while a fraudster was going through the complex process of hacking one node, the other ledgers would be updating, creating discrepancies which would be identified and rejected by the blockchain.
And that’s precisely why so many people are excited about blockchain. Banks, governments, businesses, programmers, lawyers – everyone can see the immense security potential of blockchain.
With blockchain, no individual has ownership of the data. Blockchain is distributed, meaning that it’s effectively scattered across many cooperating computers.
Blockchain’s role in bitcoin
Blockchain is the technology that underpins bitcoin and other cryptocurrencies. Bitcoin has been in existence since 2009, and is accepted as a form of payment by more than 100,000 vendors. Cryptocurrencies using blockchain are worth an estimated $150bn. While blockchain may feel like a novel technology for communications, it has been thoroughly tested in the financial world and proven its worth.
Given blockchain’s incredible potential for creating secure, tamper-resistant records, it’s not surprising that the technology is already growing beyond its crypto-currency origins.
Other applications for blockchain
Everledger is using blockchain to keep track of diamonds, and prevent stones that are tarnished by conflict (also known as blood diamonds) from entering the supply chain. And Pikcio is a secure messaging app that any organisation can use to privately communicate with their customers and stakeholders. Pikcio uses blockchain to record which messages are sent; the content of messages is not recorded in the distributed ledger, just the fact that the message was sent, when, and by whom.
Blockchain and smart contracts
Smart contracts are another potential use of blockchain tech. Smart contracts are code-based contracts that are programmed to complete certain transactions when certain conditions are met. This could be the payment of a dividend when a certain level of profit is reached, or the payment of rent at a certain date. Many different variables can be incorporated into smart contracts. The attraction is that smart contracts cannot be manipulated by anyone. The contract will only execute when the right conditions are met.
Authenticating with blockchain
One challenge of communicating in the 21st Century is the fragmentation of platforms. You might use Twitter but want to communicate with someone who only uses Snapchat. An organisation might want to send a message to their customers, but need to navigate a plethora of communication platforms and preferences.
Blockchain technology can create authentication tokens that automatically enrol users in a chosen communication platform. For example, if you want an amazing Snapchat story to be visible to everyone, you could, in theory, use an authentication token to make it available to anyone with the token – regardless of whether they were a Snapchat user.
Blockchain’s privacy limitations
One concern with blockchain is that records are shared. And the sharing aspect is the very thing that makes the technology secure. But for many organisations – and government agencies – the prospect of sharing their data across multiple servers is incompatible with their security obligations. As we mentioned in the case of Pikcio, the solution might rest in storing only metadata in a blockchain – or it might be that a new method of obfuscating data in the blockchain is required.
Blockchain technology is advancing rapidly and there are hundreds of startups exploring novel ways to put this tech to work, so we should have the answers to these questions before long. In the meantime, we’ll be watching blockchain develop with interest.