Scottish firms look beyond Bitcoin as blockchain benefits emerge - PwC

New research from PwC – Blockchain is here. What’s your next move? – surveyed 600 executives in 15 territories, including 41 in the UK, on their development of blockchain and views on its potential.

Blockchain technology, which remains best-known as the foundation of Bitcoin trading, is emerging rapidly because of its role in managing digital identify and providing security and efficiency in online transactions.

But despite the potential that blockchain holds, regulatory uncertainty and trust remain the biggest barriers to wider business adoption.

These challenges are being explored by the Blockchain Technology Academy at the University of Edinburgh, which was launched last year by the School of Informatics, in conjunction with technology group IOHK.

In its Digital Strategy published last March, the Scottish Government outlined a commitment to exploring the potential of Blockchain and Distributed Ledger Technology to make public services safer.

The Scottish Government has formed a partnership with Wallet-Services, a start-up based at Codebase in Edinburgh, to establish a blockchain strategy.

Steve Davies, Blockchain Leader at PwC, said: “Businesses tell us that they don’t want to be left behind by blockchain, even if at this early stage of its development, concerns on trust and regulation remain. Blockchain by its very definition should engender trust. But in reality, companies confront trust issues at nearly every turn.

“Creating and implementing blockchain to maximise its potential is not an IT project. It’s a transformation of business models, roles, and processes. It needs a clear business case and an ecosystem to support it; with rules, standards and flexibility to deal with regulatory change built in.

“A well-designed blockchain doesn’t just cut out intermediaries, it reduces costs and increases speed, reach, transparency and traceability for many business processes. The benefits can be compelling, if organisations understand what their end game is in using the technology, and match that to their design.”

On Scotland’s role in developing blockchain technology, Steve added: “Scotland has good momentum in exploring blockchain. While there is always more to be done, we can already see collaboration between government, academic institutions, the private sector and the dynamic emerging tech sector overall, laying strong foundations for harnessing the potential of the technology.”

PwC’s global survey results reflect the early dominance of financial services developments in blockchain with nearly half of respondents (46 per cent) identifying it as being the leading sector in the near term (three to five years).

Sectors identified by respondents with emerging potential within the same timeframe include include energy and utilities (14 per cent), healthcare (14 per cent) and industrial manufacturing (12 per cent).

Looking at leading markets for blockchain developments around the world, the US (29 per cent) and China (18 per cent) are perceived as the most advanced at the moment. However, within three to five years, respondents believe the centre of influence and activity will shift to China (30 per cent), overtaking the US (18 per cent).

For organisations looking to take their first steps into exploring blockchain, the study identifies four key areas for focus when developing either internal or industry-wide platforms: