Technology has been laying the foundations for change for decades, but are we on the cusp of another profound step change through three technologies: blockchain, artificial intelligence and the Internet of Things?
Imagine what a world of peer-to-peer value exchange, incorruptible verifiable interactions and responsive, intelligent devices would look like, what kind of opportunities would that present, what impact would it have on the way we live, work and do business. What if there were trusted intermediaries that enabled us all to transact with confidence, extremely low cost, highly efficient transactions? What if many of our negotiations could be done by smart machines that we could influence and control, what if the things we live with, the things we live in and the things we use could communicate with each other, transact and help make our live that little bit easier?
This ‘imaginary’ world is emerging now, it is a realistic prospect. Three core technologies: blockchain, Artificial Intelligence (AI) and the Internet of Things (IoT) about to re-calibrate our lives and our businesses. The technologies themselves are impressive, their potential impact and scale is perhaps daunting, but the pace of change and effort now being directed toward enabling these emerging trends is truly breathtaking. But it is their combined impact on the way we live, work and how we do business that is most profound.
There are two ways to look at these trends: as opportunities for change or serious risk of disruption. It depends on your perspective, your appetite for change and your capability to deal with the risk and opportunities these new trends will undoubtedly deliver. Some organisations are already bracing themselves, building capability, developing applications and more importantly developing new business models, products and services that will not only offer greater efficiency and effectiveness for them but introduce new benefits and experiences for their customers.
A brief explanation of blockchain
Blockchain is commonly known as the foundation for Bitcoin, it’s a distributed database of digital assets and transactions. It uses advanced cryptography to authenticate and record transactions. It’s basically an un-hackable distributed ledger. It’s coming out of the shadow of blockchain to deliver new commercial advantage. Google, for example have backed blockchain start-up, Ripple to offer banks up to 33% saving in operating costs and provide more secure transactions in time replacing expensive and error prone card transactions. But, it’s not limited to financial transactions. It’s technically feasible to record any transaction, to attribute or record any interaction: ownership of intellectual property, who bought what, who married who, who applied, what device did what. In fact a blockchain’s most valuable contribution may be yet to come, as a settlement system for the Internet of Things, an enabling platform that will enable secure, verifiable transactions between things.
The Internet of Things and blockchain
The Internet of Things, connectivity between things through networks has only just started to have a impact on our lives. One of the biggest challenges faced by the Internet of Things (IoT), is that it needs a settlement system, a way for things to agree and record what they are doing with each other, a way for them to authenticate transactions and a way for them to interact securely, without unnecessary intermediaries or intervention – that’s blockchain.
When things get connected
IoT has received a great deal of attention over the last few years, and, you would be right to wonder how much of this is just tech hype. Perhaps some of it is, on the other hand the impact of IoT may be grossly underestimated. If we can solve the challenges like inter-operability, standardising network and communication protocols McKinsey estimate that IoT has a total potential economic impact of $3.9 trillion to $11 trillion a year by 2025, and most of this value, 70% will be captured by business to business applications.
IoT impact will be felt in developed and developing economies, most industries, from health to automotive, financial services, all forms of manufacturing, travel, retail and entertainment. We are already experiencing the start of IoT as sensors, cameras, phones, GPS trackers in cars, factories, homes, streets, shops and bars are connected to networks. Consumers and business will benefit from better health tracking, inability to lose things, safer roads, factories and homes. IoT is generating new business capabilities in video analytics, sound sensing, health and well being monitoring and risk engineering, many more new capabilities will evolve as opportunities are explored and the uses for IoT expand.
Artificial intelligence – the new negotiators
Artificial Intelligence (AI) has also been hyped beyond belief, one of the favourite domains of science fiction is ow becoming a reality, but maybe not the dawn of the dominant machine, where people are replaced by machines. More likely that AI is used to supplement or enhance the jobs we do, our work, how we entertain ourselves. Automation has already replaced mundane, repetitive manufacturing, it has also created wealth and jobs for millions of people.
Cognitive machines are here now, in our homes, the ‘assistants’: Alexa from Amazon, Siri from Google, Cortana from Microsoft, your smart phone is just about to get a lot smarter. However, aside from the popular consumer innovations, businesses too, will feel the impact with Smart Contracts negotiating blockchain contracts, able to rationalise a vast range of options and choices in microseconds,optimising deal selection, learning engines matching preferences with options. Where will that leave marketing, advertising?
AI + Blockchain + IoT – What will it be like?
What will it be like when you can’t ‘sell’ an insurance policy to a person, you have to negotiate with their machines? What will it be like when customers and consumers have an infinite memory, infinite choice and capability to process choices and options using their own learning machines? Could the internet as we know it today be replaced by blockchains, truly verifiable networks where communication threads, transactions, negotiations, contracts and things are authenticated, connected and recorded. It’s time for business leaders to understand these technologies, think about the risks and opportunities they present, but most importantly it’s time to understand their combination potential which today, by all accounts is underestimated.