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Our analysis suggests the following three key insights on the strategic value of blockchain:
• Blockchain does not have to be a disintermediator to generate value, a fact that encourages permissioned commercial applications.
• Blockchain’s short-term value will be predominantly in reducing cost before creating transformative business models.
immutability. It allows information to be verified further industry and use-case level analysis, led to and value to be exchanged without having to rely our key insights on the nature and accessibility of
• Blockchain is still three to five years away from feasibility at scale, on a third-party authority. Rather than there the strategic value of blockchain.
primarily because of the difficulty of resolving the “coopetition” paradox
being a singular form of blockchain, the technology
can be configured in multiple ways to meet the
Three core insights about the strategic value of blockchain
Our analysis revealed some key takeaways about
to establish common standards...
objectives and commercial requirements of a
particular use case.
...[B]eyond the hype, blockchain has strategic value fbolorcckochmaipna. nies by enabling both cost
To bring some clarity to the variety of blockchain
reduction without disintermediation as well as, in the longer term, the creation of new
applications, we structured blockchain use cases Blockchain does not need to be a disintermediator business models. Existing digital infrastructure and the growth of blockchain as a service
into six categories across its two fundamental to generate value
( B a a S ) o f f f eu nr i c n t i g o ns s h— ar e v c e o r l d o k we e e p r i en g d a t n h d e t r ca no s s a t c s t i n o g f e x p e r i m e nB et an et i f o i t n s , f r ao mn d r e md u ac t n i o y n cs i o n mt r pa n a s n a c i et i s o n a c r o e m p l e x i t y
(Exhibit 2). Some industries have applications across and cost, as well as improvements in transparency
testing the waters. However, fundamental feasibility factors delimit what can be scaled and
multiple categories, while others are concentrated and fraud controls can be captured by existing
when as well as the realistic time scales for return on investment on proof of concepts.
Exhibit 2
on only one or two. This framework, along with institutions and multiparty transactions using
SIX DISTINCT CATEGORIES OF BLOCKCHAIN USE CASES
There are six distinct categories of blockchain use cases addressing two major needs. Address two major needs
Record keeping: storage of static information
Transactions: registry of tradeable information
1Static registry
Distributed database for storing reference data
Example
Land title Food safety and origin Patent
2 Identity
Distributed database
with identity-related information
Particular case of static registry treated as a separate group of use cases due
to extensive set of identity-specific
use cases
Example
Identity fraud Civil-registry and identity records Voting
3
Smart contracts
Set of conditions recorded on a blockchain triggering automated, self-executing actions when these predefined conditions are met
Example
Insurance-claim payout
Cash-equity trading New-music release
4
Dynamic registry
Dynamic distributed database that updates as assets are exchanged on the digital platform
Example
Fractional investing Drug supply chain
5
Payments infrastructure
Dynamic distributed database that updates as cash or cryptocurrency payments are made among participants
Example
Cross-border peer-to-peer payment Insurance claim
6 Other Use case
composed of several of the previous groups
Standalone use case not fitting any of the previous categories
Example
Initial coin offering Blockchain as a service
4 Blockchain beyond the hype: What is the strategic business value?
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