In this white paper, brought to you by the Brightline Initiative and the Blockchain Research Institute, the author lays out what CEOs should know to design strategy for commercializing this new disruptive technology. That’s what he did in the mid-late 1990s for Lou Gerstner, then CEO of IBM, when IBM was sizing up its opportunities with then-nascent Internet technology. CEOs must pick the right change agents to identify the problems to be solved with distributed ledgers, so that the company picks the right pilot project. CEOs also need a strategy for communicating about that pilot with multiple stakeholders, learning from it whether it succeeds or not, and socializing lessons so that the company continues to experiment with the new technology.
Idea in brief
There are a number of instructive parallels between the development of blockchain and that of the Internet that should inform executive decision making and the timing of action taking.
The capabilities of blockchain as Internet 2.0—enabled by distributed computing, cryptography, and game theory— could help to overcome some of the Internet’s most serious limitations for business and economic activity, namely security, complexity, and trust.
Huge volumes of transactions are now taking place online among people, institutions, and things. At the same time, large-scale fraud, identity theft, and data breaches are becoming common.
Blockchain has the potential to become the Internet of Transactions, a secure system of record for every transaction that has ever occurred. Blockchain technologies combined with reputation systems and platform strategies could help to manage risk, redistribute economic power, and further transform the nature of the firm.
For the technology to transition successfully to the mainstream market achieved by the Internet, the blockchain community must address major stewardship issues at platform, application, and ecosystem levels. Governance of standards is critical.
Executives must decide whether their companies should adopt blockchain early and start experimenting now or wait until the technology matures and risk lagging behind more aggressive competitors.