Business’s core transactional systems have not changed much since the 1950s, but that’s now changing thanks to the emergence of blockchain and cryptocurrency, according to Andy Brown, founder and CEO of Sandhill East, a consultancy to startups.

Brown, who has previously served as CTO at both Credit Suisse and UBS as well as Head of Strategy, Innovation and Architecture at Bank of America, shared his thoughts on the technology that many acknowledge has great potential, but also engenders a great deal of confusion in the recent webinar “Blockchain and Cryptocurrency Part 1: What Every Executive Needs to Know (opens in new tab).”

While still among the buzziest of buzzwords, blockchain and the cryptocurrencies which are based upon it are beginning to emerge from the hype cycle, Brown contends, and businesses of all sizes would be wise to consider how it will impact their operations.

“As the industry evolves, very similar to database technology where Oracle evolved, there’s a hype cycle,” Brown said. “Once you’re through the hype cycle the real winners and losers emerge. We’ve seen blockchain and cryptocurrency have gone through that and winners and losers are starting to emerge.”

Brown compared the current hype around blockchain and cryptocurrencies like bitcoin not only to the relational database, but the rise of Web 1.0 and the crash of the internet bubble. While there’s reason for care, companies should not fear or ignore it.

“While it’s true that many companies were bankrupted in 2001 and beyond, some of the fundamental companies of today like Salesforce.com, Amazon and Google, have emerged as very successful post Internet companies,” Brown said. “I believe this exact same model will apply to blockchain and bitcoin companies. It’s not that a bubble breaks and that’s the end of the idea. The best ideas are going to win.”

Ledgers have persisted since the 1960s, through the mainframe and client server eras, Brown said. They’re going to continue to stick around and blockchain is the first real innovation around them.

Of course, the market for cryptocurrencies has been volatile and met with plenty of skepticism. Oracle NetSuite SVP of Strategy and Marketing Jason Maynard joined Brown on the webinar and pointed out that Jamie Dimon, Chairman and CEO of JP Morgan Chase, has been quoted as calling people who buy bitcoin “stupid.”

“Actions, not words,” is something to keep in mind, Brown said, noting that JP Morgan and other large financial institutions are investing in blockchain themselves.

“With cryptocurrency, there’s been a lot of hyperbole,” Brown said. “But, the notion of digital currency has become more broadly accepted over the last five years and will become more broadly accepted in the next five. Alongside of that, more regulation and the question of SEC acceptance will play a large factor in which currencies have the liquidity to survive the volatility and which will not. Big banks will have a big say and the fintech ecosystem is innovating around this as well.”

Already, blockchain holds the potential to significantly reduce costs around secure multi-transaction management. For financial services companies, which can have up to 20 versions of their systems spread across production, disaster recovery, development environments and data warehousing environments, a single system that grants access to both sides of a transaction as well as third parties who may need to be involved (lawyers, regulators, etc.) can be a game changer.

“There are real opportunities to change the economics of transaction management from both a data and storage perspective as well as the cost of transaction management,” Brown said.

Blockchain and bitcoin are not the sole domain of large enterprises and financial institutions, however. It can impact human resources as well. For example, Maynard mentioned one pitch he heard recently of an entrepreneur planning to use blockchain to facilitate background checks.

Indeed, more and more use cases for blockchain are emerging, Brown noted. The supply chain offers a huge opportunity. Noting the recent Equifax breach, Brown also suggested that governments could begin to look to blockchain and other digital ledger technologies to make personal data safer.

In insurance, for example, Brown suggested we’re going to see providers emerge who can store transaction data in digital ledger and lend that data to others who are part of the insurance chain. Anywhere that blockchain can impact subprocesses, small businesses are emerging (with good valuations) to take advantage, Brown said.

As another example, he cited the “know your customer” process conducted by banks to ensure that no one else can access a customer’s account information. Every bank uses it and employ largely the same questions. A business that provides that check using blockchain could offer it to banks at a fraction of the cost and have a pretty good business for themselves, Brown said.

We’re further along the development cycle of blockchain than most realize, he noted.

“We are in the creation of the Apple Store era, not the Napster era,” Brown said. “Over the next 24 months it will become much clearer how small businesses can take advantage of it.”

For more information, watch the webinar recording to hear Brown’s take on blockchain and cryptocurrency (opens in new tab), including the emergence of Initial Coin Offerings (ICOs). For more background, check out our interview with Brown, CEO of Sand Hill East Offers Executive Primer on Blockchain, Cryptocurrency.

Interested in attending the next installment of this four-part series on blockchain? Be sure to register for the next one “Blockchain and Cryptocurrency: Maximize Potential, Minimize Risk” with Ray Wang, Principal Analyst and Founder of Constellation Research Inc. It will take place on March 27th.