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Game Changing Blockchain Innovations


Blockchain to date

In 2018, blockchain will celebrate its 10-year anniversary as the first distributed ledger technology was conceptualised by an anonymous person or group known as Satoshi Nakamoto in 2008. It was implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions on the network.

While bitcoin is catching a lot of attention and its exchange rates are moving up and down beyond expectations, billions and billions of dollars have been- and will continue to be invested in innovation related to bitcoin's underlying distributed ledger technology.

But where are we today when it comes to innovation in distributed ledger technology and what are some of the potentially game changing bockchain innovations that lie ahead of us (and that you may want to invest in)?

The Innovation Landscape Map

To answer the question above, I will present the latest blockchain innovations using a tool called the Innovation Landscape Map (see Figure 1). This concept was introduced in the article "You Need an Innovation Strategy" that was published in the Harvard Business Review of June 2015. Capture.JPGFigure 1: The Innovation Landscape Map

In this article prof. Gary P. Pisano suggested that business managers should articulate an innovation strategy that stipulates how their firm’s innovation efforts will support the overall business strategy. To support this approach, he introduced a new concept called The Innovation Landscape Map. This concept combines technology- and business model capabilities into four types of innovations: routine-, disruptive-, radical- and architectural innovation. It helps business managers in making innovation strategy related investment decisions.

I have adopted this concept because it represents the latest thinking about innovation and brings together insights and finding from the last two decades. Alternative models are focused on either business model- or technology innovation and are therefore considered to be ‘incomplete’ in comparison with the Innovation Landscape Map.

The four innovation types are: (1) Routine innovation which builds on a company’s existing technological competences and fits with its existing business model—and hence its customer base. (2) Disruptive innovation requires a new business model but not necessarily a technological breakthrough. For that reason, it also challenges, or disrupts, the business models of other companies. (3) Radical innovation is the polar opposite of disruptive innovation. The challenge here is purely technological. (4) Architectural innovation combines technological and business model disruptions.

Blockchain Innovation

Let's take a closer look at some of the latest blockchain innovations as they relate to the individual sections of the Innovation Landscape Map.

Routine Innovation - Distributed Ledger Technology (DLT)

Over the last several years, many experiments and proof-of-concepts have contributed to official releases of various open source blockchain distributions, such as Ethereum v3.0 (Metropolis) and R3 Corda v1.0. While distributed ledger technology is being adopted faster than anticipated, the amount of blockchain related production environments is still limited en typically focused on optimizing existing business models. 

Disruptive Innovation - Decentralized Autonomous Organization (DAO)

A decentralized autonomous organization (DAO) is an organization that is run through rules encoded as computer programs called smart contracts. A DAO's financial transaction record and program rules are maintained on a blockchain. As such, a DAO relates to business models that are enabled by distributed leder technology and that the internet alone cannot not provide.

The basic idea of a DAO is a company that is controlled by a community of people(or computers) rather than a small group of individuals. A DAO is decentralized in the sense that the shares of the DAO can be distributed among many people at the inception of the DAO, and the decisions of the DAO can be determined by the votes of all shareholders and bound by smart contracts.

A DAO is said to be autonomous for two reasons. It is autonomous in the sense that no government could shut down the DAO. It is also autonomous because, in theory, it could be run completely by algorithms. A DAO cannot be shut down by a government because there is no technical requirement for the DAO to be registered as a company in any country's legal system. A government can not seize a DAO's funds because they are held in a smart contract. A government can politely ask for a DAO to pay taxes, but a DAO does not exist in any one country but is instead distributed across the Blockchain in hundreds of countries. A DAO is also autonomous in the sense that humans are not required to be shareholders. It is entirely possible to program an algorithm to own shares in a DAO, and vote in proportion to the shares that it owns.

Examples of Decentralized Autonomous Organizations include The DAO, Dash, Aragon, Colony and They often use the Ethereum blockchain distribution which positions itself as "a decentralized platform that runs smart contracts".

Radical Innovation - Directed Acyclic Graph (DAG)

As blockchain 1.0 was mainly focused people interacting with people through public ledgers and cryptocurrencies, blockchain 2.0 started to facilitate business to business transactions using premissioned blockchains and private ledgers. Going forward with blockchain 3.0 we will see things interacting with things using public ledgers. For this purpose new technology innovation is starting to occur, focused on what is called next generation blockchain technology and which uses the concept of a Directed Acyclic Graph (DAG).  Examples include IOTA, Byteball and DagCoin.

The Directed Acyclic Graph (DAG) chain essentially means a collection of nodes or vertices, while allowing connectivity between nodes but with no circular edgings. In other words, you cannot start at one vertex and eventually loop back to that same vertex via a sequence of edges (connections).

The DagCoin white paper e.g. describes its functionality as follows:

In addition to the information of the transaction, a DAG chain unit includes the signatures of one or more users who created the unit and references to one or more previous units (parents )identified by their hashes. Units are linked to each other such way that each unit includes one or more hashes of earlier units, which serves both to confirm earlier units and establish their partial order. The set of links among units forms a DAG (directed acyclic graph). T

here is no single central entity that manages or coordinates admission of new units into the database, everyone is allowed to add a new unit provided that he signs it and pays a fee equal to the size of added data in bytes. The fee is collected by other users who later confirm the newly added unit by including its hash within their own units. As new units are added, each earlier unit receives more and more confirmations by later units that include its hash, directly or indirectly.

Unlike blockchains where issuing a block is a rare event and only a privileged caste of users is in practice engaged in this activity, a new unit starts accumulating confirmations immediately after it is released and confirmations can come from anyone, every time another new unit is issued. There is no two-tier system of ordinary users and miners. Instead, users help each other: by adding a new unit its author also confirms all previous units.

References to parents is what establishes the order (only partial order so far) of units and generalizes the blockchain structure. Since we are not confined to one-parent–one-child relationships between consecutive blocks, we do not have to strive for near-synchrony and can safely tolerate large latencies and high throughputs.

Architectural Innovation - Decentralized Marketplace for AI

An example of where business model innovation comes together with technology innovation is the decentralized marketplace for AI called SingularityNet.

This initiative is trying to solve a number of problems, including: (1) There is no way for AI communicate data to each other and coordinate processing. Everything has to be done manually and is really expensive, (2) There is no way to find AI services, nor any way to judge the quality of an AI service without using it. This creates unnecessary risk and (3) There are few people who can create AI, connect it to others, and take it to market. This makes AI too expensive, and too complicated, for most organizations.

SingularityNET is the protocol specifically designed to solve these problems while opening the AI market to the entire world. SingularityNET enables AI-as-a-service on a permissionless blockchain platform, so that anyone can use AI services easily.


The blockchain innovation landscape descibed in this article looks as follows:Picture3.pngFigure 2: The Blockchain Innovation Landscape

In what dstributed ledger technology will you be investing?

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Jeroen Bronkhorst
Account Chief Technologist (Financial Services Industry)
Hewlett Packard Enterprise

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About the Author


Jeroen has 26+ years of experience within the IT industry. From an industry perspective he spent 7 years in Government (Defense), 12 years cross-industry and 7 years in Financial Services Industry. In terms of skills, he spent 10 years in IT Consulting, 6 years in Portfolio and Program Mgmt and 10+ years in Strategy and Innovation. Geographcally he worked 10 years within the Netherlands and 16+ years Internationally.


 Warren Buffett thinks Blockchain is valuable, but he is not fond of Cryptocurrency like Bitcoin. Interesting to see how blockchain will be used as we go on into the future. Good read!


Crypto Currency is rising to get attraction day by day. And time will come when there is no paper currency will available on earth. In my country goverment is taking attention on the virtual money and working on project like DIGITAL INDIA to make it possible also the bank like the largest bank of India SBI working on it to make their customers more reliable to get their SBI balance related enquiries. Thanks for sharing this information with us. I really enjoyed the article.

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