Blockchain's powers goes way beyond the wheel of finance
Blockchain, the digital ledger that underpins cryptocurrency Bitcoin, is a software platform for digital assets. But it is starting a revolution in digital trust that could change many areas of our society, from managing healthcare records to tracking stolen diamonds.
Blockchain is a clever piece of distributed database technology, which is waging a silent revolution that could take it way beyond its financial roots to radically change the way our society works.
Brian Behlendorf, the executive director of Hyperledger, an open-source project to advance cross-industry blockchain technologies, believes that if organizations and developers pull together it could have as big a transformational effect on our society as the web.
Imagine a gargantuan, open source spreadsheet which no one owns and everyone in its network can access – but once a transaction is made it can’t be erased or altered. This is the essence of blockchain.
The first major blockchain innovation was implemented as a key component of Bitcoin, acting as a public ledger for all transactions. Organizations then realized blockchain technology could be separated from the Bitcoin currency and used for other financial tasks. Many multinational banks are already looking at potential applications for blockchain throughout the financial services value chain.
A host of companies are advancing blockchain development. Chainforce, an initiative set up by Orange Silicon Valley, is working with developers and start-ups to foster Minimal Viable Blockchain Applications (MVBA) to create real-world commercial solutions.
Orange has invested in blockchain specialist Chain and has set up a blockchain working group to explore the application of the technology in various markets. Chain recently collaborated with the Thales Group to make it easier for large enterprises to use blockchain to safely store their security credentials.
Changing the face of business
Blockchain is already having an impact on global trading. Barclays Bank and startup Wave, for example, have already completed a blockchain trade finance transaction. Trading transactions normally include many participants in different jurisdictions around the world, which requires a large amount of paperwork, including countersigned and couriered documents. Barclays believes that blockchain will speed up global transactions and reduce costs in addition to minimizing the risk of document fraud. Barclays sees the biggest beneficiaries here as the shipping industry and financial institutions.
But its potential is moving well beyond the financial sector because the distributed cryptographic method it uses can be helpful for all sorts of transactions. Hyperledger, for example, has been helping South African diamond specialist De Beers use blockchain to differentiate legitimately sourced diamonds from those that have be sourced from war zones. Startup Everledger has created a global digital registry of diamonds powered by blockchain in a bid to stamp out diamond theft and fraud.
In the defense industry, Lockheed Martin maintains it is the first US defense contractor to utilize blockchain technology. It plans to integrate blockchain into its cybersecurity protection. Blockchain will enable more efficient and secure software development along with supply chain risk management.
“These new cybersecurity approaches will enhance data integrity, speed problem discovery and mitigation, and reduce the volume of regression testing, which results in reduced schedule risk,” explains Ron Bessire, Lockheed Martin Aeronautics' Engineering and Technology vice president. “The faster our developers can discover issues, the faster we can deliver.”
Blockchain is also proving itself in record management. The University of Melbourne, for example, is working with start-up Learning Machine, affiliated to MIT’s Media Labs, to create a system that will make student records available on a secure system for employee verification. The beauty of the blockchain database is that it will be tamperproof. The Office of the National Coordinator for Health Information Technology (ONC) in the US is also looking at securing and recording medical records using blockchain.
A force for good
Blockchain may be pivotal to commerce, but it is already helping our world for the better. The United Nations (UN), for example, is piloting the technology as part of its World Food Program (WFP), utilizing cryptographically unique coupons at several shops in refugee camps in Jordan to ensure the safe transfer of funds to recipients. In another project, blockchain platform BanQu is helping displaced Somalis in Kenya create financial identities for themselves, providing unbanked people with a footprint in the global economy.
Speaking at a recent conference organized by the MIT Media Lab and MIT Review, Behlendorf drove home the point that blockchain is far more than finance. “This is an opportunity to reinvent how much of the world works”. Given the developments underway he just might be right.
Blockchain is paving the way for organizations to transform some of their business operations to create a fabric of trust. To find out more click here.