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What should CEOs consider when it comes to blockchain in their own companies? Well, for most people, single-use applications are the best place to start because they aren't novel and require little cooperation with other parties. One solution is to accept bitcoin as a form of payment. Bitcoin's infrastructure and market are well-developed, and embracing the virtual currency will compel a range of departments to develop blockchain capabilities, including IT, finance, accounting, sales, and marketing.

Another low-risk option is to employ blockchain internally as a database for applications such as asset management, internal transaction recording, and identity verification. This might be especially beneficial for firms that are having trouble reconciling different internal databases. Organizations may build the skills they need for more complex applications by experimenting with single-use apps. Experimentation is becoming simpler all the time, owing to the advent of cloud-based blockchain services from both start-ups and major platforms like Amazon and Microsoft. Localized apps are a logical next step for businesses. Private blockchain networks are getting a lot of investment right now, and the projects involved appear to be positioned for substantial short-term effect. Financial services firms, for example, are discovering that establishing private blockchain networks with a small number of trustworthy counterparties may dramatically decrease transaction costs.

Organizations can also use specialised software to solve unique challenges in cross-border operations. Blockchain is already being used by businesses to monitor products across complex supply networks. This is now taking place in the diamond business, where stones are being tracked from mine to customers. Such tests may now be carried out using off-the-shelf equipment.Because current solutions may be difficult to dislodge, developing replacement applications needs careful preparation. Focusing on substitutes that don't need end users to adjust their behaviour substantially but provide alternatives to expensive or ugly solutions might be one way to approach. To gain momentum, replacements must provide functionality comparable to existing solutions and be simple to absorb and adopt by the ecosystem.

Blockchain-based gift cards are an excellent example of a well-thought-out alternative. By utilising blockchain to manage the movements of cash within accounts—rather than depending on external payment processors—retailers who offer them to customers may drastically reduce transaction costs and improve security. The shared ledger allows for balance transfers and transaction functionality between businesses with these new gift cards.

Blockchain - restructuring the economy

Applications that will change the world are still a long way off. However, it is prudent to assess their potential today and invest in the development of technologies that will enable them. They'll be most effective when they're connected to a novel business model that deviates from traditional value generation and capture principles. Such business concepts are difficult to implement, but they can help firms achieve future development.

Consider how law firms will need to adapt in order for smart contracts to work. They'll need to learn new software and blockchain programming skills. They'll almost certainly have to reconsider their hourly payment model and consider charging transaction or hosting costs for contracts, to name a few options. Before taking any action, executives must ensure that they understand and have evaluated the business model consequences. Transformative situations will be the last to take off, but they will be the most valuable. Large-scale public identification systems for tasks like passport control, as well as algorithm-driven decision making in the prevention of money laundering and in complicated financial transactions involving numerous parties, are two areas where they might have a significant influence. We believe it will take at least another decade, if not more, for these applications to gain widespread adoption and critical mass.

Emerging platform-level players will coordinate and regulate the new ecosystems as a result of transformative apps. These will be the future generation's Googles and Facebooks. To take advantage of such chances, you'll need to be patient. Developing the necessary foundations for them—tools and standards—is still worthwhile, even if it is premature to start making major expenditures in them today.