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What is the strategic value of blockchain?
A new BSV Association The report outlined the strategic value of blockchain for businesses across a range of use cases, from optimizing smart city fares and reducing manufacturing supply chain costs to monetizing fan experience and central bank digital currencies (CBDC).
In May, the Swiss-based custodian organization of the The BSV Blockchain—BSV Association—has published a relationship in collaboration with Boston Consulting Group entitled “Navigating Digital Transformation: Building Trust in an Automated World”.
The first in our series of in-depth looks at the relationship examined how it was posed Blockchain Technology as a Solution to Trust Issues created by the “new digital age”, especially those relating to artificial intelligence (AI). In this second deep dive, we explore the use cases outlined for how blockchain can help companies establish and maintain trust in their data, systems, and technologies.
“To thrive in today’s data-driven, digital economy, your company must digitize its processes at every stage and ensure that these processes are always auditable and secure. Blockchain should therefore play a central role in your digital transformation strategy,” the BSV Association said in the report.
“By ensuring data integrity, blockchain increases trust and reliability across all your digital platforms.”
In specific terms use casesThe report divided them into three broad categories: examples of how blockchain could protect the data that enables businesses; examples of how blockchain could create new sources of revenue; and examples of how blockchain could increase the efficiency of payments and data exchanges.
Protect your data
The report sheds light on how blockchain technology can be used to secure data collection from verified systems, ensuring it remains accurate, tamper-free and tamper-proof. This is essential for operational integrity and compliance.
One such example was the optimization of tariffs for smart cities. With Blockchain and IPv6—the newest and most secure Internet protocol—smart city administrators can confidently use the Internet of Things (IoT).
IoT refers to a network of interconnected devices that collect, exchange and act on data via the Internet, enabling intelligent and automated interactions between objects and systems.
“Low transaction fees and high throughput ensure that microtransactions, such as parking fees and per-minute utility charges, are economically viable and managed securely,” the report suggests.
Another use case proposed by the BSV Association was how blockchain could lower manufacturing supply chain costs revolutionizing production logistics.
Second Shipping logistics provider Maersk, about a fifth of foreign trade costs come from red tape. The report argued that blockchain could alleviate this burden.
“Blockchain provides a secure and scalable platform for managing IoT device data. It enables smart contracts to automate supply chain transactions at a much lower cost, resulting in significant savings in bureaucratic costs.”
The third use case arises from the advantages that blockchain could provide in terms of accurate and efficient reporting, especially for the many companies interested in social environmental governance (ESG).
Specifically, blockchain can ensure the integrity of emissions data captured by IoT sensors along the supply chain, providing a cost-effective solution for comprehensive carbon footprint reporting. This could help companies align with industry standards, such as those of the EU Corporate Sustainability Reporting Directive Guidelines.
The final data-related use case offered by the report is in the ever-growing field of artificial intelligence, where the BSV Association explained that blockchain could help support or automate AI operations.
“Blockchain can help verify, tag, and attribute content to its source, helping ensure AI models are trained on reliable data.”
The ability to verify, verbally tag, and accurately attribute content to its source also comes into play in the second category of use cases outlined in the report, which are how blockchain can create new revenue streams for businesses.
Create new sources of income
Monetization of digital assets can become difficult when an organization cannot easily verify ownership of such assets or track how its intellectual property (IP) is used. Blockchain provides a powerful framework for attributing digital content, with a clear audit trail, as well as helping to protect data.
According to the BSV Association, this makes it an invaluable source of revenue for many companies across all industries, and the report outlined three use cases to underscore this point.
The first example is in royalty collection, where “blockchain networks can manage complex intellectual property rights and automate royalty distribution, ensuring that creators, such as authors or musicians, benefit from the use of their AI-generated work.”
This could bring huge benefits to creatives and creators in the age of artificial intelligence when copyright disputes end up in lengthy and costly legal proceedings rather than being resolved through a streamlined monetization process.
The second use case also benefits creators by bringing blockchain into the realm of fan experience and engagement.
The report explains how blockchain-based fan experience apps could transform event tickets into “digital collectibles” that grant ticket holders access to exclusive perks and help them stay engaged with a company. Some notable football clubs—soccer clubs, for U.S. readers— are already implementing similar ideas, such as “fan tokens” to increase engagement.
Fan tokens have it has not been universally acceptedbut in theory they give owners access to a range of fan-only benefits, such as voting rights on club decisions, rewards, merchandise designs and unique experiences.
The third use case where blockchain could increase revenue for businesses is in IoT micropayments. Blockchain networks offer businesses the ability to buy and sell data generated by IoT devices via subscription-based micropayments.
“This business model allows users to access specific, up-to-date information and pay only for the data they need,” the report explains.
The ability to facilitate micropayments—small transactions or payments typically less than a dollar and in some cases just a fraction of a cent—is one area where blockchain technology can really shine; another is increasing the efficiency of payments and data exchanges.
Fast and secure settlement of transactions
The final category of use cases outlined in the report is how blockchain helps digital systems manage transactions seamlessly and at a lower cost by sharing data via blockchain. This eliminates the need for reconciliation, “a boon for companies that frequently collect, send, and receive money or information in digital form.”
An example is CBDCwhere blockchain can facilitate real-time transactions and support innovations, including currency programmability and new financial products.
Blockchain also makes carbon trading easier and more reliable, as well as potentially more environmentally sustainable. The report pointed to one provider, ZeroSix, that provides U.S. oil and gas producers with blockchain-native carbon credits in exchange for leaving reserves in the ground.
“In this way, ZeroSix provides companies with an incentive to refrain from extracting and burning these fuels, helping to meet the planet’s carbon budget,” the BSV Association wrote.
The final use case explored by the report was blockchain as a trusted tool for financial markets.
For example, JP Morgan (NASDAQ Quote: JPM) launched the Onyx Initiative in 2020 to promote blockchain and digital currency projects in the banking industry. Products launched under Onyx include solutions that facilitate cross-border payments, simplify customers’ liquidity funding needs, and solve complex information sharing challenges.
This rounded out the report’s discussion of the wide range of use cases that demonstrate how blockchain technology can provide strategic value to businesses across industries. But it’s worth noting that not all blockchains are created equal, with some better able to provide the scalability required for microtransactions and mass adoption than others.
The third installment in this series of insights into the BSV Association report will explore how the organization’s namesake blockchain, BSV, is uniquely suited to many of these use cases, such as providing the scalability to facilitate mass micropayments.
Stay up to date with the latest from the BSV Association: Download the first report in this series via this link connectionFull details for part two on “Navigating Digital Transformation: Building Trust in an Automated World” can be found here Here.
Watch: Micropayments are what will allow people to trust AI
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