It might seem like the promises of blockchain have arrived out of nowhere and not without a crypto wallet full of doubt. Even so, executives are ready to take the technology—which creates an unchangeable digital ledger of transactions—more seriously. Industries ranging from healthcare and financial services to CPGs and television are exploring how to utilize blockchain technology.
According to a new Deloitte survey of 1,000 executives across a range of industries, 74 percent said they see a “compelling business case” for using a blockchain, with many already experimenting or implementing one into their business. The results, released this month, found that 34 percent of execs said they are already creating a blockchain system, while another 41 percent said they expect to in the next year.
And these aren’t always small tests. The Deloitte survey revealed around 40 percent of respondents said their organization will spend at least $5 million in the next year on blockchain systems, indicating potentially lasting growth for a technology that promises to improve trust and transparency across transactions.
“We are at an inflection point—momentum is shifting from a focus on ‘blockchain tourism’ and exploring the technology’s potential to building practical business applications,” said Linda Pawczuk, a principal with Deloitte Consulting. “As more organizations put their resources behind this emerging technology, we expect blockchain to gain significant traction as its potential for greater efficiency, support for new business models and revenue sources, and enhanced security are demonstrated in real-world situations.”
Of course, like databases—the less sexy and more traditional tool that many compare blockchain to—the use cases for blockchain vary depending on the industry. For example, at Johnson & Johnson’s JLabs incubator, several blockchain companies are experimenting with how it might impact everything from the company’s supply chain to its finances, according to Kate Merton, who heads JLabs.
According to Merton, J&J is now exploring how blockchain technology and machine learning with clinical data and “nontraditional” medical data—such as information from social media—can match a person’s specific health profile with various products and services. By showing consumers how their data is used, she said it incentivizes them to share information if they know how it helps them over time.
“If you have a patient with a very rare disease and you say ‘can you share your data with us so we can help you quicker?’ I’d personally be incredibly incentivized to share that,” Merton said during a conference at Columbia University about brands and blockchains. “Whereas with our skin-care companies, where someone is just sharing their preferences, that’s not a dire situation. You have to pick how you work with the individual.”
Other sectors are thinking about how blockchain might affect logistics at both the industry and consumer level. Laurie Tolson, chief digital officer of GE Transportation, said blockchain could help make a car’s ownership history more transparent by showing the “chain of custody” for where a vehicle comes from and where it goes.
Tolson said logistics and transportation is an $8 trillion industry, with $140 billion per day tied up in disputes or settlements in the U.S. between supply chain participants—both shippers and receivers.
For example, IBM and the Danish shipping company Maersk used a blockchain last year that tracked the shipment of flowers from Kenya to the Netherlands. The traditional process involves handoffs and paperwork by as many as 30 people and organizations that includes 200 interactions and communications. Blockchain could—at least in theory—help improve the transparency of these transactions, along with making it faster and more secure. (The same process could also be applied to other perishable goods such as pharmaceuticals and food.)
“If you could just take a little of that dent out by having smart contracts and having a blockchain mechanism that allows you to acknowledge shipments when somebody is expecting it,” Tolson said, “it can help speed everything up. You still do the checks and the right things, but from a supplier and a shipper-receiver perspective, it can do wonders around the globe.”
According to Deloitte’s survey, about 43 percent of respondents said blockchain is a top priority for their company’s strategy. More than half saw potential with supply chains or with the Internet of Things, while more than 40 percent saw potential for managing digital records.
Others remain skeptical. Phil Easter, head of emerging platforms at American Airlines, said there could be some use cases, such as for helping to secure passenger identities or trading information between airlines. However, he’d rather invest in other areas of innovation such as artificial intelligence and machine learning rather than blockchain. There are some things that companies just shouldn’t use a blockchain for, Easter said.
“I’m not going to move my reservations to blockchain because it sounds like a cool idea,” he said.