For all the visibility of the ongoing cryptocurrency bear market, there's a second, less noticed tier of related digital technology that's thriving, irrespective of the grim pricing news surrounding Bitcoin and its alt-token peers. The number of companies successfully leveraging blockchain technology and using cryptocurrencies in marketing campaigns for profit keeps growing.
For those unfamiliar with blockchain technology it acts as a decentralized ledger, recording all data simultaneously across all nodes on its network. Because of its transparency, many see blockchain as a game changer for supply chain management and complex corporate logistics.
Indeed, a broad array of multinational software companies have been using blockchain to track and monitor products and deliveries throughout their supply chains. These marquee names, including IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), SAP (NYSE:SAP), Hewlett Packard Enterprise (NYSE:HPE) and Oracle (NYSE:ORCL), have each been edging toward blockchain integration within their proprietary enterprise software and cloud services.
Separately, mainstream brands have found marketing-related uses for proprietary, as well as publicly-traded cryptocurrencies. Photography giant Eastman Kodak (NYSE:KODK) created its own digital currency KODAKCoin, which works on the Ethereum network, It could ultimately become a mainstream way for customers to make payments in the world of digital imagery.
For a limited time at the beginning of 2018, KFC Canada (NYSE:YUM) used Bitcoin in a marketing campaign, allowing customers to buy their fried chicken with cryptocurrency. Burger King Russia (NYSE:QSR) launched WhopperCoin at the end of August, as part of a customer loyalty initiative. With each purchase of the chain's signature sandwich, customers receive a WhopperCoin, which are deposited into a digital wallet issued by the fast food chain. The token is powered by the distributed ledger network developed by WAVES, an Ethereum rival.
Are any of these corporate undertakings viable for the long-term? Or are they primarily stunts, ways in which to ride the blockchain and cryptocurrency zeitgeists in order to gain attention and signal the company has some cutting-edge technology chops?
Cobus Kruger, CEO of Stackr thinks all of these efforts are the real deal.
“Blockchain technology—although arguably still in its infancy—has persistently shown promise as to providing solutions to multiple problems faced today. As companies comprehend this fact, many will strategically shift to generate more efficiencies in their product offerings by harnessing blockchain.”
One anecdotal example provided by Kruger, which speaks to the power of the blockchain idea, if not to the specifics of the result, occurred last year when publicly traded Long Island Iced Tea Corporation changed its name to Long Blockchain Corp. (OTC:LBCC). The company subsequently saw its stock price rise by close to 300% over the short-term. However, the former iced tea maker had a dubious connection to blockchain technology and its shares eventually plummeted, to the point where the price per share sank so low the stock was delisted from the NASDAQ on June 18.
Still, Kruger believes the example makes clear how powerful the association with a disruptive technology such as blockchain can be for a company's image. Moreso if the connection is relevant and integral to the business.
"Obviously, iced tea and blockchains don’t have much in common. However, it starts to get interesting when we examine deep-rooted traditional financial services that show great potential for enhancement through blockchain technology.”
Westpac (AX:WBC), one of Australia's 'big four' banks is another institution that's been using blockchain successfully. According to Qiao Nan Han, CEO of Transcendence Networks, a blockchain powered infrastructure development platform:
“By using artificial intelligence combined with data analytics and blockchain technology in order to automate the manual procurement and payment processes, Westpac is one of those institutions that are successfully leveraging this new technology to stay ahead of the curve.”
The use of smart contracts—essentially digital contracts that are visible on the blockchain—will make the process of signing a deal more transparent and a lot more seamless, explains Han, making for more satisfied parties all round. “The future looks bright for banking if other institutions follow in Westpac's footsteps. They will no doubt be seen as thought leaders in this space,” Han adds. “The possibilities are endless with blockchain technology. It's a great sign of the times that an established institution like Westpac are on board.”
This past summer, Hewlett Packard Enterprise partnered with Streamr, a UK-based, blockchain-backed data platform, on a pilot project to drive data monetization. Carl Rodrigues, advisor and partnerships ambassador at Streamr explained the nature of the project:
”By partnering with Streamr, HPE is seeking to capitalize on an opportunity to create new data networks, by bringing its cutting-edge computing power to the collaboration and gaining first mover advantage. This will enable the use of smart contracts to facilitate trading and communication of data between people, machines, and AI [artificial intelligence].”
It appears companies are seeing lots of strategic business value in blockchain technology. Indeed, according to a recent report released by New York-based ABI Research, "the technology is on track to reach $10.6 billion in revenue by 2023." The advisory company predicts blockchain could have transformative effects on a variety of industries including finance and insurance, public services, supply chain management, retail and consumer sectors and even arts and entertainment.
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