Unless you had been completely locked out or had been living in the Himalayas or have unplugged yourself over the past year, it is possible that you would have missed out the din on Blockchain. Blockchain is the new kid in the block and the shiny new toy in the Financial Services world. > What is a Blockchain? Why Should I Even Bother?
Feel confident — you are not the only one to have this question hanging over your head. In fact this has been an active board level topic of conversation across many large organizations. If you are in any way connected to the Financial Services industry, you better know it now else you could get to hear this from your boss pretty soon. Other industry segments are discovering their use case as well albeit a bit slower.
A Blockchain is a distributed ledger where transactions are verified and securely stored in a network.
How does it differs from a database or even a shared Excel sheet?
Great question !! In a way it is similar but it has certain unique attributes that differentiates it from a traditional database or an Excel sheet. A Blockchain is :
Immutable Listen to this quick run down by Blythe Masters , CEO of Digital Asset Holding on what a Blockchain means.
Excited? Check out the following resources to get you started.
Blockchain technology breakdown > The Hype
The hype around Blockchain is not without a reason. Financial institutions which were weary of the Bitcoin has embraced Blockchain which is the underpinning tech of Bitcoin with open arms.
Interest levels are so high that every problem is being viewed through the Blockchain lens.
Going by Google Trends, year 2015 was just the beginning. But year 2016 has started with a bang for Blockchain.
- Again there is a significant uptick on the number of transactions conducted on Blockchain
Many in the Financial Services industry despite having deep interest and having invested in startups / consortiums, have started to realize that Blockchain is not going to be enterprise ready any sooner. Certainly it is not a silver bullet either. Citi despite having invested in Chain.com, which is one of the earliest Blockchain startup, has rightly pointed out in its recent Global Perspectives & Solutions report on Digital Disruption that Blockchain is a cost play for the Financial Institutions in the long run and its prime time is still ways off . However, Blythe Masters of Digital Asset Holdings is confident that this technology would be a reality in Banks within two years . Initiatives such as the R3 Consortium, Hyperledger etc. are certainly a step in the right direction. Banks are continuing to experiment on Blockchain and pilot use cases through their innovation teams. There exists an ever growing and contributing Open Source Community that is vibrant and is going the extra mile to ensure that this technology doesn’t go the Bitcoin way. They are striving to ensure that issues of security, scalability, governance etc. are getting addressed to make Blockchain enterprise ready through their rapid release cycles. We could see a bigger play coming in from the system integrators pretty soon. Infrastructure providers like Microsoft have taken a lead by positioning Azure as a platform for providing Blockchain-as-a-Service. Microsoft has on-boarded a broad array of providers on its Azure platform with the recent one being the famous R3 consortium. Few recent significant developments are :
IBM has made significant investments and inroads into this technology. It had contributed around 40K lines of code to the Hyperledger project and has also announced that it is planning to bring Artificial Intelligence into the Blockchain space through Watson . > Points to Ponder
Is Blockchain a panacea or yet another blurb?
How Blockchain would be regulated?
Are the regulators and the courts willing to trust something like a Smart Contract?
Is there an accepted Governance, Risk and Control framework to make Blockchain work in an enterprise?
Who would be the final arbitrator in case of cross-border payments or settlement related cases?
What would be the ecological effects and costs of creating and managing such an extensive network of systems and the enormous amount of power that gets used for mining and upkeep of the network?
How hack proof is the Blockchain network?
If Blockchain would become the single source of truth and an accepted form of Digital Identity, would personal identity and privacy be at stake?
Who would bear the cost of the network on a distributed ledger? > Parting Thoughts
Whichever way it goes, Blockchain is definitely a cool technology that has the potential to disrupt several things around us. Stay tuned…
Do you work on anything exciting using Blockchain? Has your organization ever tried or willing to look into this disruptive technology?
Happy to hear your views, thoughts and feedback. Please do post them as comments below.
Ramesh Babu is a veteran data evangelist and analytics thought leader, he champions the Analytics, Blockchain, Data themes for customers globally.