Blockchain, the underlying technology of BitCoin, which is becoming disruptive and revolutionizing technology across the industries is a hot topic for a reason. It represents a distributed, electronic ledger, an ever-increasing list of encrypted transactions called “blocks”, linked in chronological order to form a chain and contains a true and verifiable record of transactions ever made in the system. It can be shared among public or private users and that creates an unchangeable record of transactions, each one time-stamped and linked to the previous one.¬† Consensus should be reached between participants in the system in order to update a blockchain, and when new data is entered, it can never be erased.
Blockchain data is not stored in any single location. The records kept are easily accessible and verifiable. As there is no centralized version of this information and the data is hosted by millions of computers simultaneously, it is almost impossible a hacker or intruder to corrupt the data. It is not controlled by any single entity and there is no single point of failure.
Bitcoin was the first application of the technology, but nowadays it is estimated that there are some 700 similar cryptocurrencies (exchangeable value tokens) available on the market,¬† as well as a range of other potential adaptations of the concept are currently in development or production.¬† Personal computing became accessible with the invention of the Graphical User Interface (GUI) and the so-called “wallet” applications, which people use to trade with cryptocurrencies. Blockchain doesn’t simply solve the data access or sharing issues, it also solves a confidence problem by being able to share whatever and whenever, in a way that’s immutable, trusted and secure.
Some of the leading platforms for blockchain development today are:
– Hyperledger, an open-source industry consortium formed by the Linux Foundation in 2015 as an effort to support the blockchain-based distributed ledgers. The protocol focuses ledgers developed to support international business transactions, catering leading financial, technological and supply chain businesses, with the objective of improving a lot of performance and reliability aspects.
– Ethereum, a custom-built platform that was introduced in 2013 by then 19-year-old software developer Vitalik Buterin, and originally used for verifying online payments, but its capabilities grew under the Swiss nonprofit Ethereum Foundation. Smart contract is a term used to describe computer code that can facilitate the exchange of money, content, property, shares, or anything of value. Ethereum platform allows development of decentralized applications. Any services that are centralized can be decentralized using Ethereum, such as intermediary services that exist across hundreds of different industries, such as loans provided by banks to intermediary services such as registries, voting systems, regulatory compliance etc.
– Ripple Consensus Network, issued in 2012, has been developed upon an open-source distributed consensus ledger, Internet protocol, and native currency termed as XRP (ripples). It enables instant, safe and almost free global financial transactions of any scale without any chargeback.
– R3‚Äôs Corda is a distributed ledger protocol for recording, supervising and synchronizing the financial agreements among regulated financial institutions.
Given the importance of the technology, many companies are looking for a ways to standardize the technology, talent, and platforms to drive future initiatives and, eventually, coordinate and integrate multiple blockchains working together across a value chain.
A vast ecosystem of cross-industry use cases are emerging: logistics, energy, billing at electric vehicle charging stations, social media by giving users an opportunity to own and control their images and content etc. Gartner Inc. projects that blockchain‚Äôs business value-add will grow to $176 billion by 2025.
The distributed ledger technology has given us the opportunity to transform and re-architect the financial industry, by moving from a system of many banks with many ledgers with associated reconciliation, central clearing parties and auditing to a simpler system of many banks but fewer ledgers where reconciliation is automatic.
Blockchain Insurance Industry Initiative (B3i) welcomed 23 new members from across the insurance sector and began market-testing a new blockchain reinsurance prototype. It is dedicated to developing trading platforms across the whole insurance value chain using Blockchain based technologies. B3i solutions will deliver material efficiency improvements in transacting re/insurance.
One of the areas blockchain technology can find an implementation is the integration with enterprise ERP systems, by drawing existing data from enterprise systems and being able to tightly control with whom it is shared.¬† McDermott estimates that 80% of the world’s corporate data resides in silos, as owners of that information are concerned that releasing the data can lead to losing the competitive advantage. Blockchain will probably not replace ERP systems, but become a complementary application that simplifies the integration between parties and reduces vulnerability. It can be asset management, including tracking supply chains, parts shipments and even to log and verify maintenance work.
Blockchain integrated with the retail application can be used to track shipments:
- the branch the shipment came from
- the packaging unit it went through
- the distribution center it passed through etc.
It can be also used for audit logging, by providing reliable way of tracking what happened in an organization to satisfy regulatory auditors.
A number of questions still remain for discussion and future resolution, for example, can a blockchain platform be embedded in the architecture of systems that already communicate with each other? Is it possible to scale existing prototypes sufficiently to meet global enterprise needs? How will multi-chain integration work in practice?
As all these challenges are being addressed now and also in the years to come, the number of companies that experiment or adopt these emerging technologies is constantly on the rise. InterWorks is one of the companies that uses Blockchain. Read more about its implementation on the following link:
Senior Technical Architect