How blockchain is disrupting business applications, personal identity

Those exploring the impact of blockchain on their business and personal lives should proceed with caution, according to a pioneer in enterprise blockchain technology and the adoption of digital assets such as bitcoin. 

“This isn’t for the faint of heart. This is a really tough space to be working in. It’s rapidly changing, and this is going to be a transformational period of time,” said Jay Schulman, a University of Illinois alumnus and consulting principal at RSM, where he is the national leader for blockchain and digital assets.

Schulman shared his views in the recent Blockchain & its Application in Business webinar, hosted by Robert Brunner, associate dean for innovation and chief disruption officer at Gies. The College is bringing together academic and industry leaders for a series of webinars to answer key questions about blockchain, discuss its disruptive power, and explore how professionals can adapt and incorporate it into their careers.

“Blockchain is one of the largest forces in emerging technology and Jay looks at how to mitigate the risks of adopting blockchain through operational security and proper implementation of its technology,” said Brunner.

The landscape is changing quickly with the Biden administration signing an executive order March 9 calling on the government to take a unified approach to the regulation and oversight of digital assets. They will look at the risks and benefits of cryptocurrencies and explore a digital version of the dollar.

Schulman explained that the underlying technology of blockchain is not new and that his initial instinct in 2012 was that it was like “Dungeons and Dragons money.” Fast-forward five years, and the Chicago Mercantile Exchange had asked him to help them start to implement blockchain.

“When I saw a very old school financial services organization looking to apply it, I knew there was something to it—it had a future,” said Schulman. “Decentralized applications in the finance space are not novel. They’ve existed and been accessible to very large corporations, very sophisticated traders, and now they are being offered to us.”

Schulman likened today’s blockchain space to the internet circa 1998. He encouraged the audience to apply their personal and business passions to this new disruptive technology and try out blockchain applications like bitcoin and non-fungible tokens (NFTs) to start to comprehend it. 

“There is a tremendous amount of risk, and we don’t all don't understand the nuances of some of these applications. Without playing with it, you're not really getting anywhere,” said Schulman. “In the short term, there's going to be a challenge of understanding the underlying data.”

Schulman explained blockchain as “a Microsoft Excel spreadsheet that we keep adding rows to.” Once written, you can't write it again. He likened it to understanding enterprise resource planning (ERP), where you don’t need to personally change fields in Oracle, but you do need to know how it works and what you can and cannot do with it.

“If you are not a coder don’t stress about it,” he added. “You need to understand the concepts of how everything works.”

As an example, Schulman shared how Adidas served up an Into the Metaverse NFT, which is essentially interesting artwork that the marketer structured as a membership program. If you hold this NFT, you have the right to buy certain shoes first.

“You could write the code to go figure out how to make the NFT, but the bigger critical thinking is to start asking questions like ‘Are we issuing intellectual property or artwork or a membership pass? Are we issuing an ID that logs us into a system?’ These are the building blocks onto which blockchain will take a new shape,” he said.

Schulman suggested decentralized autonomous organizations (DAOs) as a starting point. They are a blockchain structure that allows an internet community to work together on a common goal. One that gained attention late last year was a group called ConstitutionDAO that raised $47 million to buy a rare, first-edition copy of the US Constitution at auction. They ultimately lost to investor Kenneth Griffin and subsequently shut down the group.

“With a DAO, you get a front row seat at what happens. Do it not because you want to go co-invest or   contribute, but just to just understand how they work. This will help you think about what this transformational governance structure looks like,” said Schulman.

Looking ahead, he’s especially interested in how blockchain will change how we share personal information using a concept called zero-knowledge proofs. For example, instead of showing your driver’s license to prove that you are over the age of 21 when you walk into the bar, a zero-knowledge proof can answer the question, “Are you over the age of 21?“

“You can apply this in so many different areas,” said Schulman. “We’ll be able to share confidential information in a way that's a lot more comfortable. To use blockchain effectively in your business, you need to have the critical thinking that uncovers what questions you can answer in this way.”

Gies Business is dedicated to providing more resources to help you navigate this exciting new technology. Join us for the first annual Blockchain Summit on April 22, 2022. The event will be held in Champaign, Illinois and virtual opportunities to participate are also available. Register for the event here.