Clayton Christensen is credited with coining the term “disruptive technology” in his 1997 book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.
Christensen writes: “disruptive technologies bring to a market a very different value proposition than had been available previously”.
Some of the best-known cases of disruptive technology include the displacement of offset printing by digital printers and stock exchanges being replaced by electronic communication networks.
In the future, blockchain disruption is set to impact multiple sectors in the economy, such as currency transactions, stock exchanges and even precious stone transactions.
The practical impact of blockchain is that once a transaction has been initiated, the transaction record is simultaneously available to all parties and historical data cannot be altered without broad agreement from the network. This removes the costly and time consuming process of reconciling transactions or other data externally, giving blockchain the potential to make interactions more efficient, less expensive and safer.
Blockchain disruption started coming into people’s consciousness when Blockchain appeared as the underlying platform supporting the crypto-currency Bitcoin, which was somehow implicated in transactions in the shadow world – the “dark web”.
However, like many of the examples in Christensen’s book, it is when innovations transcend their early applications that the real power is obvious. And that is already starting to occur. In late October this year, the Australian Financial Review reported that a shipment of 88 bales of cotton from the US represented “the first time that two independent banks have used a combination of blockchain, smart contracts and the internet of things to facilitate a trade transaction”.
For blockchain to continue to demonstrate its legitimacy in the world beyond the shadows there must be trust and confidence in the system. These will come once market-based and technical challenges are overcome, and include having:
- a system of international standards that are compatible with regulations and controls in financial systems;
- clear guidelines for building blockchain applications;
- relevant privacy and security measures;
- interoperability between different blockchains to facilitate competition and support innovation.
The need for standardisation in the use of blockchain technology, and international standards in particular, has been recognised by several Australian stakeholders, including the Treasury, the Department of Industry Innovation and Science, the Council of Financial Regulators, Fintech Australia and the ASX. In collaboration with Standards Australia, Australian stakeholders will play a leading role in the development of international standards through the International Standards Organisation (ISO).
The standards to be developed will cover:
- process and method;
In September 2016, ISO approved the establishment of a new technical committee for blockchain – ISO/TC 307 Blockchain and electronic distributed ledger technologies – that will be Chaired by an Australian expert with Standards Australia taking the secretariat. Already 30 other countries have indicated their interest including the UK, US, Germany, South Korea, Japan, Finland and Singapore.
I believe that leading the ISO blockchain committee will place Australia in the perfect position to help inform, shape and influence the future direction of international standards to support the rollout and deployment of blockchain technology in this era of blockchain disruption.
Dr Bronwyn Evans
CEO, Standards Australia
Chair, Industry Growth Centre for Medical Technologies and Pharmaceuticals
Read next: Sanjay Mazumdar, CEO of the Data to Decisions CRC, takes a look at what the national security sector can learn from Big Data disruption.
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