Mckinsey looks into opportunities for suppliers and consumers

Ten years after blockchain’s inception, it is presenting new opportunities for both suppliers, such as semiconductor companies, and consumers, such as industrials.

Blockchain is best known as a sophisticated and somewhat mysterious technology that allows cryptocurrencies to change hands online without assistance from banks or other intermediaries. But in recent years, it has also been promoted as the solution to business issues ranging from fraud management to supply-chain monitoring to identity verification. Despite the hype, however, blockchain’s use in business is still largely theoretical. A few pioneers in retail and other sectors are exploring blockchain business applications related to supply-chain management and other processes, but most are reluctant to proceed further because of high costs, unclear returns, and technical difficulties.

But we may now be at a transition point between Blockchain 1.0 and Blockchain 2.0. In the new era, blockchain-enabled cryptocurrency applications will likely cede their prominence to blockchain business applications that can potentially increase efficiency and reduce costs. These applications will be in a good position to gain steam since many large tech companies may soon begin offering blockchain as a service (BaaS). Rather than just providing the hardware layer, as they’ve traditionally done, these companies will extend their services up the technology stack to blockchain platforms and tools. As blockchain deployment becomes less complex and expensive, companies that have sat on the sidelines may now be willing to take the plunge. (See sidebar, “What advantages do blockchain business applications offer?”)

What advantages do blockchain business applications offer?

Will blockchain business applications continue to grow and finally validate their promise? Industrial companies, which were largely on the sidelines during the Blockchain 1.0 era, want an answer to this question because they could find opportunities to deploy business applications that improve their bottom line. Semiconductor companies are also interested in the growth of both blockchain business applications and blockchain-enabled cryptocurrency because this could increase demand for chips.