Blockchain… something you should know today.
What exactly is Blockchain?
Everybody is talking about Blockchain.. well.. not everybody… but I’ve been talking about with my ten years old daughter (it’s a long history… but we talk about Cognitive Computing, Internet of Things and others strange stuffs sometimes) and probably you should start to think about it.. too..
In a CNBC interview, IBM CEO Ginni Rometty says that the blockchain technology will be immensely valuable for anything that involves trading assets. She explained how blockchain is for “anywhere you’re trading some set of assets and need to be sure about the authenticity.”
What exactly is Blockchain?
Blockchain is a decentralized ledger technology used by a business network to securely exchange digital or physical assets. It enables businesses to work together with more trust. More specifically, Blockchain is a permanent digitized chain of transactions that is grouped in blocks and cannot be altered. The high security level of blockchains makes it easier to create cost-efficient business networks where virtually anything of value can be tracked and traded, without requiring a central point of control.
To understand better the concept of trust, for example, think about your bank account. To open that account, you must to prove somehow who you are, maybe providing some ID card, passport or any other valid for of identification, right? Of course, the bank must to validate this information, checking the legal value of all this pieces of paper you provided, specially to verify if you’re not a criminal or if you’re been banned from other banks. They need to check if they can trust on you.
A cool thing about using blockchain, is that your bank could collaborates with other banks or perform searches on shared customers databases from private and public entities and some distributed ledgers to cross-check your profile, relying on consolidated, consistent and up-to-date view of required data.
Well, at this point you probably can imagine,a t this point how this network can decrease the cost of compliance by using a single, trusted set of data across all these systems. It’s the integration, darling!!!
You know, business today never operates in isolation, we all are part of a complex, intricate and growing bunch of “system of systems” that shares millions of different versions of the same information sometimes, simply because in this complex network each of the participants keep their own records and updates on their own.
With Blockchain each participants of this network could share a ledger, which is updated every time a transaction occurs, agreeing how transactions will be validated, delivering faster, controlled and auditable b2b interactions. It works for suppliers, distributors, financial institutions, regulators or anyone in the world who need to make a secure exchange.
In fact, Blockchain started as a means of recording and verifying transactions and was a main factor in the success of the digital currency, Bitcoin, but it has become a lot more than a way to exchange money.
Some benefits of blockchain are the reduction of settlement time from days to near instantaneous, reduction of overhead, cost intermediaries and risk of collusion and tampering. Otherwise, blockchain can increase, as I say before, the trust through shared processes and record keeping and for sure, it can enable companies to rethink key processes within their industry.
Well, the topic deserves a deep dive and probably I will do it, writing another post in the future, but, I would like to, at least, explain, how I feel myself so enthusiastic about blockchain…. It’s because that It really seem to be tailored to companies like mine… IBM is already leader in blockchain, since before it was born, since IBM is leader in many core industry and process management based on transactions. This leadership can be differentiated from other competitors when helping clients to manage, develop and test their blockchain solutions.
Not only, the broad, cross-industry and governed open-source approach of IBM in blockchain (for example with the Linux Foundation’s Hyperledger Project ) is critical to advance the potential for blockchain and make it mainstream and widespread.
Why blockchain is so interesting?
Blockchain is one of the most interesting and disruptive forces to come along in quite some time. I select a list of 4 reason why Blockchain is attracting so much interest all around the world :
1. Blockchain can Prevent payment scams.
One of the most talked about advantages involving blockchain technology is how it can prevent future payment scams, protecting both buyers and sellers by using “smart contracts.” This procedure would avoid those instances where you purchase an item and the seller doesn’t follow through.
2. Blockchain is peer-to-peer.
The blockchain is a peer-to-peer system, meaning that transactions are between you and another party. The technology could also remove all of the lawyers, realtors, and banks when transferring a property title or house deed. This would not only save you a bundle in fees, it would also speed the process up from a day to hours.
3. Blockchain speed-up transitions.
With Blockchain is possible to send and receive money from across the globe in just a matter of minutes. No matter the scenario, blockchain decentralized and the P2P system allows you to settle any digital wallet transaction quickly, as opposed to waiting days or weeks.
4. Blockchain rewards loyalty.
The blockchain can improve loyalty programs by giving customers the ability to trade points among each other since the transactions would be placed in the public ledger. It would also open up the possibility of using points at different vendors. For example, you could use some of your airline points at your favorite coffee shop or eCommerce site.
Because of those capabilities, the blockchain will be able to disrupt the following;
- Finance — Blockchain will remove the need for traditional banking and financial institutions by replacing back-office systems with a P2P system.
- Contracts — ‘smart contracts’ will be used by a network that is routed to recipients based on future events, and a computer code.” Besides, contracts, deeds, titles, and other important documentation will be shared on the public ledger.
- Patents and Copyright — the blockchain can prove that you had ownership of the intellectual property first.
- Voting — When people cast their ballots, it will be recorded during elections.
- Collectibles — The blockchain can be used to track and validate scarce or limited items like coupons or a piece of artwork.
- Trust — Cryptographic signatures can be used to eliminate distrust on everything from shipped products to changing shifts at work.
The ownership of anything can be recorded and traded using the blockchain.” We’re even seeing the tech being used for everything from live-streaming to mining light bulbs to creating one digital identity that would replace all of those usernames and passwords you have.
So.. What’s next? How can I get into this?
Another exciting aspect to follow and learn about blockchain for me, being an IBMer is that I’m working for the only company at this moment who can combine a deep industry and process expertise with its own cloud-based tools and secure blockchain services. We are already leader. And as Ginni said… We will keep being leader on this, more and more in the future.
If you want to continue your blockchain learning journey, first at all.. Check this video and fall in love with this technology and check it out this TED talk by Don Tapscott that really help to understand this world-changing, trust-building technology which, he says, represents nothing less than the second generation of the internet and holds the potential to transform money, business, government and society, as well.
See you next time!
Wave Project Manager for Datacenter Migrations | Design Thinker | Cognitive Learning Leader at IBM
Originally published at https://www.linkedin.com on September 30, 2017.