Why blockchain is the future of documents - just not yet
Just as the cloud steadily rose to become a must-have for transacting business, the concept of blockchain appears poised to remake business in the coming decade.
Blockchain sounds relatively simple – it's a series of transactions recorded using encryption as a way to validate each piece of information. But it's much more complicated than a sequence of digital transactions. And that sophistication could offer areas like finance, government and law the security they need to ensure transparency, fight fraud and accelerate transactions in the digital space.
But the adoption curve for blockchain might be even steeper than it was for the cloud. For starters, the infrastructure required to implement blockchain right now isn't insignificant. Its impact on how companies store, share and analyze data will require a complete restructuring of tech stacks. Businesses should consider how they currently store data, use it to create documents like contracts, and how they should prepare themselves for the next era of technological advancements like blockchain.
It might seem like the entire world conducts business online, but most companies still operate with 20th century technology: emails with attachments, PDF documents, even hard copies of documents that must be stored physically. The opportunities for human error, introduction of inaccurate data and a slower business process can cost both time and money.
Blockchain can solve those problems for a wide range of use cases. Because blockchain is ostensibly decentralized, its transactions don't rely on a single server; that means if a server goes offline, other servers can pick up the slack and no data would be lost.
For companies that send sensitive documents, blockchain could offer reliability when sending documents like contracts. In fact, "smart contracts" are just one way blockchain could make itself indispensable in the near future: documents that not only self-execute complex instructions, but that are nearly impossible to sign or execute by mistake.
But the promise of blockchain is miles away from its current reality for companies. Most companies simply aren't ready to implement the technology necessary to make blockchain viable. First, both sides of a transaction would need blockchain technology to execute a transaction: access to data, the technology to create, receive and sign documents like contracts. That means data and document workflows would have to change: the technology used for data storage, document generation and sharing would need complete overhauls.
It's also hard to ignore that blockchain is still in its infancy, which makes it a risk most companies don't want to take. According to Gartner, issues like scalability, centralization and governance are barriers to rapid adoption. In fact, blockchain might actually slow business for some companies: because of the computational power needed to verify and confirm transactions, it could take at least 10 minutes to execute each block. Adding the burden of time to an investment in new technology makes blockchain cost-prohibitive for many organizations.
How to Secure Data and Documents Today
So, what can companies do to reach the level of security, speed and scalability blockchain promises – without adopting such an early technology?
To prepare themselves for the future of technologies like blockchain, companies must prioritize what's most important to them: leveraging data, document creation, simplification of complex workflows and customer experience must all factor into how companies choose technology to add to their tech stack. Because blockchain is such an early concept, it's possible it might evolve to integrate with existing technology and save companies valuable time and money.
But until blockchain becomes as seamless to use and integrate as the cloud, companies must protect their data and their documents with existing solutions. It's a case of technology needing to adapt to the businesses that use it, instead of the other way around. Blockchain has a clear role to play in business. But that role is years away.