Not Just Finance - Airline, Energy, Design, and Real Estate Businesses Also Embracing Blockchain

- Digital wallet for miles, peer-to-peer electricity trading, content distribution, and value generation through cross-industry collaboration -

Outside Japan, an attempt to create a blockchain-based platform to allow ordinary households to trade their solar energy began in about 2016. In Japan, development of a blockchain-based system began to take shape in 2017.

For example, in March 2018 Tokyo Gas, which focuses on electricity retailing, invested in Digital Grid Corporation. This is a venture company promoting blockchain-enabled platform business for direct electricity and environmental value trading. As an implementing entity of the Ministry of the Environment-endorsed project to generate value from CO2 reduction using a blockchain-powered platform, Digital Grid Corporation provides a platform that allows power companies and consumers to directly trade the environmental value of renewable energy. For the future, the company is considering launching a platform business to allow individual households to directly trade their excess solar energy with energy companies.

It is possible for a power company to use blockchain to provide a system for households to trade their excess electricity. For example, since April 2018, Kansai Electric Power Company and Australian Power Ledger have been conducting joint experimental research on blockchain-enabled direct electricity trading. This research simulates cryptocurrency payment for the amount of energy collected through smart meters installed at residences of individual prosumers (those who sell generated electricity) with solar-power generation equipment when their excess energy is sent to consumers. Power Ledger is a company with a track record of creating blockchain-based inter-household trading systems.

So in the energy industry, as illustrated above, blockchain is gathering momentum as a solution for the 2019 Problem, and shows promise as a post-FIT business model.

Creating a Content Distribution Platform with Anonymity and Smart Contracts

Evident elsewhere is the creation of a platform to take advantage of blockchain features and realize innovative business. Digital content distribution is one such example.

Japan produces an enormous amount of entertainment content such as manga, anime and games that are popular outside Japan, too. The country also has many companies, local governments, and individuals that own such wonderful content. Meanwhile, the issue of illegal websites where such content is distributed while ignoring the rights of creators continues to loom. Unfortunately, we still have not encountered services that allow content owned by companies and individuals to be used easily and safely in various areas.

Blockchain, however, could make a difference. While securing anonymity, blockchain saves all transaction records with no falsification risks. It can also be used for small-payment settlements because it can keep individual transaction fees low.

An example of developing a blockchain-powered digital content distribution platform was the experiment of a nail-art design service using content owned by companies, local government, and individual designers. Fujitsu Broad Solution & Consulting ran the trial at a citizens' participatory event called 078 (read as zero-nana-hachi) in Kobe City in April 2018. In this experiment, purpose-specific communities were created on the platform. Content owners, providers of products and services using their content, and service users distributed digital content on the platform while following the unique rules implemented for the experiment. A smart contract system was established so that content users automatically paid for the amount of content they used. In general, people who like nail art can turn various designs that they see and like in daily life into their nail art designs. Some people, though, may be unable to find designs they like so easily. This platform not only introduced them to a wide variety of designs, but enabled them to use new designs they like as nail art.

Cross-Industry Transaction Record Sharing and Analysis Generated New Customer Value

A whole new approach to blockchain has also begun. Business entities in different fields are using blockchain to share their transaction records, and analyzing the shared data from many angles to generate new customer value.

Mitsubishi Estate, Fujitsu, Softbank, and the University of Tokyo are working on this approach. On May 14, 2018, they began experimenting with a new town development in the Marunouchi district of Tokyo using data in a business-academia collaboration.

More specifically, Fujitsu is applying its unique data distribution and use platform created with blockchain technology to distribute and share data from Mitsubishi Estate and Softbank. Mitsubishi Estate has building equipment operation data and commercial facility data, while the Softbank Group owns crowd movement data. The distributed and shared data is analyzed using Softbank's platform and knowledge of business units. This way, they can generate cross-industry business and services. For example, they can combine office building power-consumption data and crowd movement data for areas around these buildings to develop effective sales promotion strategies. Their goal is to employ data in ways that a combination of seemingly irrelevant data will result in generation of new value.

As we have seen, many industries are adopting blockchain to realize capabilities beyond the reach of traditional systems, or to develop platforms to co-create business that never existed before. It seems safe to assume that system creation will spread into a whole raft of business fields.

Exploration of how to use blockchain must have begun in your business field, too. For businesses, what significantly enhances their competitiveness is not limited merely to improvements in system efficiency or cost reduction. It also depends on how much they can extract their own co-creation capability, which is the power to work with other companies and generate new business.

In the next article, we will explore the future development of blockchain.

Author Profile
Tetsushi Hayashi
Nikkei BP Intelligence Group Clean Tech Laboratory, Chief Research Officer
Mr. Hayashi joined Nikkei BP after graduating from Tohoku University's School of Engineering in 1985. As a reporter and editor-in-chief for outlets such as Nikkei Datapro, Nikkei Communications, and Nikkei Network, he has covered stories and written articles on topics such as cutting-edge communications and data processing technologies as well as standardization and productization trends. He consecutively held the post of chief editor for Nikkei BYTE from 2002, Nikkei Network from 2005, and Nikkei Communications from 2007. In January 2014, he became Chief Director of Overseas Operations after acting as publisher for magazines including ITpro, Nikkei Systems, Tech-On!, Nikkei Electronics, Nikkei Monozukuri, and Nikkei Automotive. He has served at his present post since September 2015. Since August 2016, Mr. Hayashi has been writing a regular column, "Creating the Future with Automated Driving," in the Nikkei Digital Edition. Moreover, he published the "Overview of International Automated Driving Development Projects" in December 2016 and the "Overview of International Automated Driving/Connected Cars Development" in December 2017. Mr. Hayashi has also served as a CEATEC Award judge since 2011.