What the article did not mention, however, was the potential impact of a subtle, yet revolutionary technology that many experts agree will change the way that companies across almost every sector conduct business. That technology is blockchain, a distributed ledger system that allows firms to conduct transactions and facilitate processes with a greater degree of transparency, efficiency, and security than ever before. In the near future, the telecommunications industry may provide services to customers more effectively and with a greater focus on the protection of personal data—an important quality in a digital age in which the general population continues to grow more concerned with institutions’ ability to keep their sensitive information private.
In order to understand what makes this possible, one must first understand the concept of blockchain technology itself. Originally established as a platform for the cryptocurrency Bitcoin by Satoshi Nakamoto in 2009, blockchain is a distributed ledger that facilitates the transfer of data through a shared database. While transactions on the blockchain are publicly viewable for the purposes of preventing tampering through public accountability and self-certification, the identity and specifics of all transactions made within the blockchain remain anonymous. Blockchain employs the use of encryption and algorithms to document transactions, while offering users more speed, efficiency, transparency, trust, and security than any other technology previously known.
While blockchain offers numerous benefits, there are legal aspects of the technology that have yet to be formally evaluated. Governments have yet to create laws or legal standards that outline regulations to keep the technology in check, nor have they established protocols or consequences in regards to how companies will be dealt with in the event that blockchain fails. While the United Kingdom has elected to operate with a “hands-off” approach to regulating blockchain, it allows companies in industries such as finance to test and innovate within a “regulatory sandbox.” Moreover, the United States have taken greater steps toward regulating blockchain.
Regardless of the country in which a telecom company operates, executives should approach blockchain from a standpoint of cautious optimism, keeping in mind that certain legal issues have the potential to arise as the technology becomes a larger part of the business world. Smart contracts, for example, have the potential to revolutionize the way that firms in many industries conduct business, and yet they must be evaluated for both efficiency and any potential flaws before they are adopted as part of a routine mode of operation. Smart contracts at their core are fixed and do not take into consideration the nuances between the parties, which may impact the strong, trusting partnership between two firms.
In addition, it is important to note the sweeping, positive changes that the technology has the potential to create within the telecommunications sector. One of the most important things that blockchain can do for telecom companies is to streamline internal functions and facilitate the creation of new products. Additionally, blockchain has the potential to open up streams of revenue for telcos in the form of new services, such as mobile wallets and 5G service. Other services that blockchain could enable include the provision of international mobile wallets and the creation of smart cities that operate on a large network of devices connected by IoT.
Many major telcos have already embraced blockchain, and are poised for further investment. In the last two years, firms such as Sprint, Verizon, Orange Silicon Valley, and NTT DOCOMO Ventures have involved themselves in this budding sector through activities such as investing in blockhain startups and launching their own blockchain initiatives. Some have filed patents for technology that will further the industry’s growth, such as Verizon and its patent for a blockchain that stores digital content passcodes.
