Oh, blockchain your intriguing trendsetting, often used incorrectly, minx you. How we love to talk about you and your digital asset cousins Crypto, NFT, and CBDC opportunities without being sure exactly what we are going to do with you. It is the latest technology, people are investing in it, and everyone is talking about it— so it must be for our company, right? Not so fast. There is a lot to figure out about this technology before you even do a proof of concept for your firm, not to mention a full-scale rollout. This is a great time to call in a partner who has more experience and insight than your internal team to determine what your path forward might look like and how you can apply it to your strategy as a business.
You might be asking, how would a partner help with that? Great question, and here are some of my answers:
Identify Relevant Use Cases for Blockchain Including Crypto, NFTs, and CBDC
As an example, let’s think about a large realty firm where NFTs can be used in real estate to simplify and speed up transactions, enable smart contracts for properties in effect, allowing automatic payments, or even create decentralized home rental services that masterfully change the rental game—all while protecting sensitive data like renter information, credit card details, and customer data.
This is very different than an NFT in the supply chain, where an NFT-based bill of lading, or other identifying documents, could provide a source of verification that cannot be tampered with, lost, or stolen. This could largely hamper the prevalence of fraud in the trade, as well as open new forms of ownership and investment throughout the supply chain journey.
Now, the movement of goods and movement of funds don’t need to be two separate systems that are forced in the process by a plethora of checks and manual verifications. Instead, payments could be in a smart contract program that triggers as various stages of fabrication and shipping occur, in a way they simply cannot be changed or un-synced from the process, thereby protecting financial transactions throughout the transaction chain.
Partners who are deeply embedded in these industry solutions will offer a unique perspective, lessons learned, and examples that can greatly aid your journey.
Understand Costs and Benefits of Blockchain Relative to Alternative Mainstream Technologies
This is a big one. We all know by now that blockchains act as decentralized systems for recording and documenting transactions that take place involving a particular digital currency. The blockchain is basically a transaction ledger that maintains identical copies across each member’s computer within a network. The fact that the ledger is distributed across each part of the network helps to facilitate the security of the blockchain. But is the cost worth the investment?
Enter a partner with the right knowledge to help you sort it out. As an example, traditionally, the transfer of worth has been simultaneously expensive and slow—especially when applied to payments taking place across international borders.
When multiple currencies are involved, the transfer process generally requires multiple banks to participate in multiple locations before the recipient of payment can receive their money. There are existing services to help speed up the process, but they are typically very expensive.
Enter blockchain; with the potential to provide a much faster and cheaper alternative to traditional cross-border payments methods. Money remittance costs internationally may be as high as 20% of the transfer amount, blockchain can allow for costs just a fraction of that amount and guarantee real-time transaction processing speeds.
While there are some hurdles to be passed, including regulation of cryptocurrencies in different parts of the world and security concerns these real-world applications are starting to happen now. The right partner can start you on the right journey now to ensure your long-term costs are held down yet performance is not affected.
What Partners Can Do for Non-Mainstream Strategies
There are also a few other things the right partner can do for those firms that are considering a little less mainstream strategy up to and including a full remake of their business to a digital asset. These include:
- Analyzing fundamental value drivers of digital assets, including utility, governance, and staking tokens and helping you map those to your longer-term strategy
- Discuss the role of regulation in the digital assets economy, and provide insights into how it applies to blockchain-based services in your industry based on their other clients, previous strategic work and local regulations. While this is still a work in progress area they can lend some good insights to consider on your journey
- Assess structures and processes of decentralized organizations and decentralized finance applications including providing insights to your DAO (decentralized autonomous organization) and DeFi strategies to help you determine your path forward
- Choose the right blockchain network for different applications and/or launching a digital asset effectively using their experience and lessons learned to help you avoid some pitfalls
Of course, as with any partnering strategy you will want to carefully the partner’s experience factor with blockchain by asking the right questions about their current talent level, certifications, education, and client lists. Isolating the right partner will help you avoid potholes and get more from your investment in this exciting new area. Enjoy the journey as you #partnerup for blockchain.
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