How blockchain works
At its core, blockchain technology is a distributed, peer-to-peer ledger. Where transaction ledgers are traditionally owned by a single entity (like a bank), a blockchain is equally distributed among all those who submit data or transactions. The information is non-tamperable, add-only and completely decentralised.
This means transaction data is recorded securely and against rules set by a consensus – in most cases, previous transaction criteria. While the technology found its genesis in cryptocurrency transfers, modern (and future) applications extend far beyond this sector.The key here is public versus private blockchains. A public blockchain is typically used to support cryptocurrency transactions, where all participants have the same level of access. A private blockchain functions in the exact same way, but can have privacy settings and centralised ownership layered onto it – and this is where it gets interesting for businesses.
Blockchain is expanding far beyond the realm of cryptocurrency.
Blockchain’s impact beyond cryptocurrencies
How blockchain benefits Australian businesses
While the Australian Government’s Digital Transformation Agency urges pragmatism when dealing with blockchain technology, it acknowledges that it may unlock significant service delivery efficiencies in the future – for almost any industry.Deloitte lists procure-to-pay, accounts receivable or payable, reconciliation and general ledger processes as the lowest-hanging fruit that blockchain technology can automate. That means real-time processing, automatic bookkeeping, potential risk reduction and standardisation of all data transfers.
What does blockchain mean for your business?What does blockchain mean for your business?
The flipside here is that finance functions in particular may find their manual work cut significantly. But, as with most technology-driven change, this should result in the evolution of roles rather than the removal of them.
As blockchain technology proliferates throughout Australian businesses, expect to see much more talent rising through the ranks on the back of blockchain understanding, operation and management. Tech teams should cautiously look to upskill in this area, and explore the benefits this technology can bring to their own business.It is one of many data storage solutions, and it is far from the dominant system of the day. But in the coming years, blockchain has the capacity to subsume significant amounts of manual processing work – it’s best to be prepared.