The business opportunities Blockchain will drive

Blockchain is a top 10 strategic technology trend according to a Gartner study. By 2030 it is expected to provide $3.1tr of added value to businesses worldwide.

Blockchain can make tracking items and transactions in the supply chain radically faster and

simpler when used in conjunction with IoT technology, cutting administrative and logistics

timelines in shipping by an estimated 85%.

Movement of goods involves dozens of individuals and organizations communicating with each other, blockchain can dramatically simplify record keeping.

For example, dispatching roses from Kenya to Holland reportedly creates a 25cm-high pile of paperwork – which would be obviated by the Blockchain technology.

Blockchain in numbers

The Core principles of Blockchain

In fact Blockchain is a composition of already existing technologies:

• Decentralized peer-to-peer technology
• Private / public key cryptography + hashing algoritms
• Consensus algorithm

On the Information storage level, we recognize following characteristics:

• Distributed
• Transparent
• Immutable

This brings Blockchain to the 4 core principles:

• Consensus, because all parties must agree to network verified transactions.
• Immutability, because anything written on the ledger cannot be altered.
• Provenance, because there are records of where each asset has been.
• Privacy, because permissions and identity ensure appropriate visibility of transactions.

The main Business drivers to implement Blockchain

Businesses already struggle with a lot of technological challenges, why would they want to take on another complex technology in this challenging landscape.

Blockchain offers various value chains, which weren’t possible before.

Process Optimization

The blockchain ‘platform’ allows a Multi-party collaboration on a single version of the truth.

Time & Cost Reduction

Since blockchain is a Peer-to-peer network without intermediaries, a lot of the overhead administration of the middle man can be avoided. This results in faster handling of the various chains, as well it reduces the rate of error.

Transparency & Auditability

The blockchain central ledger technology provisions an undeniable history due to immutability of records. The immutable history is the one version of the truth of who did what when and how.

Risk & Fraud minimization

Building further on the concept of an immutable central historical ledger, it will be easy to justify —– Provability & automated business rules (smart contracts)

Challenges and obstacles on the road to Blockchain

Since Blockchain is a composition of multiple technologies and needs to integrate with other technologies and systems, vast challenges remain.

Let’s give an overview of the most relevant challenges

Analysis of enterprise data

Business systems to measure and manage the business generally feed off of the enterprise’s system of record. Blockchain data must be integrated with these business systems to give a single view of all the data.

High cost of implementation

Cost-savings is generally an important driver for technology adoption. Blockchains require significant computing power to process transactions and the initial startup costs to implement can be a major blocker for many companies.

Distributed vs decentralized application models

Blockchain is designed to avoid single party or centralized control over a distributed system, still many current apps adhere to a distributed application model.

Compliance with regulatory requirements

Blockchains are built to be “publicly visible” but most businesses need to be able to protect and restrict access to their data as well as have a way to audit transactions to prevent fraud.

Integration with existing systems

Organizations need a way to integrate blockchain-based systems with their existing systems. To facilitate a smooth transition, considerable changes must be made to the existing systems.

Landscape of Blockchain technologies

To get an understanding of which technologies are involved, see in the following image an exemplary and non exhaustive overview of blockchain technologies

History and status of the Blockchain project

Back in late 2015, The Linux Foundation started the Hyperledger Fabric open source project.

The Blockchain phenomenon and the momentum of the hyperledger open source project continues today. It is one of the fastest growing projects launched by the Linux Foundation.

There are now five different blockchain framework projects — Fabric, Burrow, Iroha, Sawtooth and Indy — and with the recent addition of 13 new members, the project counts a total of 230 participating companies.

As the Hyperledger open source project grew in significance with more companies, individuals and projects, so did the technical acumen of the blockchain community. This included the growth in blockchain concepts, blockchain platform fundamentals, agile development practices, automated testing frameworks, performance testing frameworks, DevOps capabilities, cloud engineering and network security skills contributing to Fabric.

With the tremendous amount of collaboration going on in the community, the platform and its capabilities grew. The open source nature of the project allowed developers from all over the globe to contribute. The pluggable architecture of the project provided a foundation for scientists to research different technologies to optimize the platform for a variety of solutions.

Industry challenges tackled by Blockchain

Shipping

Blockchain technology addresses the many supply chain challenges as it establishes an immutable record shared of all the transactions among network participants that is updated in real time, enabling permissioned parties in a private blockchain environment access to trusted data in real time.

Blockchain may emerge as a valuable tool that can allow all participants in a shipping industry supply chain to understand the movement of goods. For example, as goods move from one place to another or one part of a company to another, companies may use blockchains to keep track of how goods are moving and where they are. But blockchain may also enable things like supply chain validation, food safety verification, etc.

Technology giant IBM has created a joint venture with Danish global leader in container transport and logistics company Maersk.

The joint venture aims to release a blockchain-based digital platform for all aspects of the global supply chain system, from shipping to ports, and banks to customs offices, to improve companies’ supply chains.

Supply chain

Blockchain applications span the supply chain.

London-based blockchain firm Everledger uses IBM’s platform to track diamonds from mine to store, leaving stolen items and conflict-zone jewels outside the system.

Meanwhile, IBM has also partnered with Walmart to track lettuces, steaks and cakes.

IBM’s long-standing mantra is ‘Think.’ IBM is fascinating and compelling in the way the company, and its people, apply technology and scientific thinking to major societal issues.

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This article is in collaboration with IBM.

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