Emerging Technology : Benefits of Blockchain in Digital Transformation.
Emerging technologies are something we can’t avoid in the IT industry. Every emerging technology has always been treated with mistrust and skepticism from when the Internet was first conceived to when we first started using cloud technologies, especially around inventions like bitcoin where we all wish we had more faith when Satoshi wrote his white paper on that, we could all retire now if we had bought a few of those! One of the first technologies we will discuss (although not in detail) is bitcoin, whether we choose to invest in this erratic currency or not we can’t ignore what the technology has contributed to the future of IT.
The underlying technology behind bitcoin is known in IT terms as blockchain, this is not just a technology applicable to an internet currency to be used to buy illicit things from the dark web! Some of the key functions of a blockchain that could benefit many different types of organisation’s are:
i) Verification without the need for third parties
The principle of a blockchain allow all participants access to all the information in the blockchain (or distributed database) and allows them to ‘append’ only information applicable to them using private keys that allow them access to the blockchain. Everyone that maintains a copy of this blockchain agrees the transaction is valid and it is then approved and visible to all participants as part of pre-defined rules or what is known as a ‘contract’ this is electronic and agreed by everyone so rules can be executed automatically.
ii) The data cannot be altered or changed once added to the blockchain
This allows a very high level of auditing on all transactions made on a blockchain, once data is entered onto a blockchain the technology does not allow modification of the entered data. This does not mean particular records relating to data can’t be changed further down the blockchain, but the previous version of that data will be maintained forever.
iii) Military grade cryptography is used to protect the integrity of data
On a blockchain each ‘block’ is protected by a cryptographic hash of the current block plus details of the previous block this prevents anyone changing data held within a blockchain, if this was attempted the entire chain would become invalid and be ignored by all ‘members’ of the blockchain.
This also protects the integrity of reading the blockchain, unless the participants private key was compromised it would be impossible for a third party to access data specific to that participant and make fraudulent entries on the blockchain.
iv) Decentralized storage
In traditional database systems companies store their data in a relational database management system (RDBMS) this may be a cluster spread over 1 to several computers, this within an organisation may be a good high availability approach.
When we talk about blockchain the principle is hundreds or thousands (or millions of computers in bitcoins case) may hold a copy of the full blockchain. Unless the world got an EMP (electromagnetic pulse) we would never lose the blockchain data!
v) “Smart Contracts”
As mentioned previously a company can build into the blockchain rules that apply to all participants in the blockchain agree to, which then removes third party involvement (discussed in point i)) as long as all participants “trust” the blockchain, transactions can be carried out automatically and seamlessly improving business process speed and reliability.
Not all systems or industries will be a fit for a blockchain solution, it is not a magic bullet to fix everything. However, with the right partner to guide your company you can decide where you would benefit from this emerging technology.
Some key industries where blockchain has been proven to be of benefit are Agriculture, banking, healthcare, education, e-commerce, property, mining, retail, transport and logistics, media/entertainment, automotive, recruitment and the list goes on.
We will try to add more specific use cases in the future, if you have your own use case requirement please contact us, we will be happy to prepare information for you to evaluate.
Ray Paul Bsc