Blockchain may sound like a complicated term, but the concept at the heart of it all is straightforward. It simply describes a digital ledger that records transactions that are both listed chronologically and publicly. It rose to prominence within the context of Bitcoin over the last nine years.
Though a young technology, blockchain’s poised to disrupt a range of industries — from online marketing to advertising software monetization and everything in between. Blockchain stands to make a significant impact on the legacy oil and gas industry in ways that are worth exploring.
The Power of Blockchain: Breaking Things Down
Centralized systems — like the kinds commonly employed by the legacy oil and gas industry — bring with them a few issues. First, they’re usually difficult and expensive to setup and maintain, especially over long periods of time. More than that, they’re inherently vulnerable — people can manipulate, hack and even corrupt them, threatening the integrity of their data.
Blockchain technology addresses these issues simultaneously. It can track and record transactions (like oil and gas trades), plus it’s cheaper, more secure and more efficient than legacy systems.
Each transaction recorded in blockchain becomes public and permanent, meaning it is impossible to edit. The record of that transaction (along with other pieces of identifying information) is public forever. This provides a superior level of visibility and accountability to a situation such as commodity trading.
Blockchain Benefits for Oil and Gas
Blockchain’s implications are potentially massive — a digital disruption in the best way.
In oil and gas, blockchain has the potential to reduce the costs of maintaining, updating and securing proprietary legacy systems since it’s a decentralized system not tied to a particular hardware. Plus, it’s inherently more secure.
These benefits extend beyond commodities trading, too. Thanks to the ways blockchain helps organizations cut costs, it’s allowing nearly every oil and gas company to compete globally.
Petroteq out of Canada, for example, is using blockchain as a tech foundation to tap into new reserves of energy like the Utah oil sands — all while increasing efficiency, lowering costs and reducing environmental risk.
Blockchain and Oil and Gas: Accountability, Visibility and Efficiency
History has long demonstrated that, almost more than any other industry, oil and gas is not opposed to innovation.
Companies operating in this space don’t just welcome disruption — they court it. They’re eager to adopt new technologies that improve efficiency and profitability. Make no mistake: blockchain is the most significant way to cut costs and increase efficiency in a generation, and oil and gas will soon feel its effects.