Blockchain development

Blockchain for enterprise business is more open than you think

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I’m sure by now you have heard time and again the common misnomer that blockchain equates to Bitcoin and vice versa. With that said, I’m going to start with the simple fact that Bitcoin leverages blockchain as an underlying technology and this underlying technology has tremendous capabilities. These capabilities have spawned an enormous and ever-growing number of use cases that can leverage blockchain which, in the beginning, produced a significant number of questions regarding uses, implementations, regulations and more. As a result, many different protocols and variations of blockchain have been created trying to address these questions.

Much like the protocols, the questions have also been evolving, including questions around openness and making or saving money. Making money does not mean cryptocurrency necessarily. While there is a space for cryptocurrency, there is also a space outside of crypto which businesses are running. This is where I want to address questions and elaborate on the typical journey into blockchain as a foundational technology for business applications, some of the use cases, and also about the burning questions around openness. With that said there are times where blockchain isn’t required at all. In fact, that is probably the right place to start.

What’s your potential blockchain ROI?

Does blockchain make sense for you?

There are absolutely times that blockchain isn’t needed at all. If you are working in a space that requires little to no collaboration and has basically a single authoritative entity, it’s simple. Get a database, secure that bad boy up as much as possible to avoid tampering, and then simply push the information out to the parties that need it. It’ll be faster processing without the checks and balances needed for verification of trust in a blockchain solution, and you probably don’t have to depend on other information to be provided by a bunch of others to get stuff done.

However, if you are working with many others and want a system with insights and validations that require collaboration across multiple participants, you are starting to get more into a blockchain use case. Remember blockchain is a team sport, and without the team there is no need to use it. This is of course a very simple starting view point from a business perspective, but I think you get the idea.

Let’s look at using blockchain for improved efficiencies and visibility from provenance to the completion of your business deliveries and talk more about the journey into why and how businesses are leveraging the capabilities.

Early adopters and misconceptions

When starting my own adventure in blockchain, I spent a significant amount of time listening to customers and groups, both large and small, trying to figure out why it makes sense to use this in business. It started to become extremely evident, as is usually the case, that smaller companies and startups were more ready and willing to jump on a new technology bandwagon. Partly because of the technology itself, but also because of the potential to disrupt and leverage themselves into the larger enterprise space, becoming first movers in the changing way things are done. One major status quo being disrupted is the concept of the middleman and the extraneous fees quite frequently associated with them.

On the flip side, enterprise business was treading a little more cautiously with a focus on how something like this could work with all the processes and regulations already in place. Both sides of the coin absolutely make sense.

Then of course there has always been the fear factor and some misunderstanding with the technology itself. This has only been fed and amplified by security breaches amplified by the news media in areas like financial institutions, identity theft, social media and credit bureaus. It’s only human nature that when under attack, the inclination is to hunker down and get better control, not to spread things out leaving data exposed to attack.

Finally, adding further complication to the conversation — especially if you are talking with someone that is running a highly secure business — is a preconceived notion equating blockchain to the shady side of cryptocurrency in funding terror, drug and human trafficking, as well as cyber extortion. Be careful, because even bringing the subject up might get you socked in the eye before being thrown out of the room.

Thankfully, most conversations are now spent discussing the principles of the technology, answering questions such as, “I have a database, why do I need a new one?” and “Why would I make my data open, and give it to my competition?” Another hot topic is how security works in the open. Openness and sharing do not mean that security is thrown out the window allowing for pure chaos and anarchy — in fact, it’s quite the opposite.

Let’s really digest the different aspects of openness further, such as open source with technology and protocols, open data with ledgers and transactions, and probably the most difficult piece, working with others in an open environment to achieve real value.

Opening up to the openness of open source

I feel open source is the easiest of the openness factors. Blockchain has a tremendous amount of hype, and for the first time I’d say it’s justified. This is a technology fundamentally changing the way business is being done in the modern era, so doesn’t it make sense to enable the world to help guide, drive and work on that technology? I would say “yes” and I also want the ability to know what’s happening at the foundational level while not having a single entity dictating what and how things are going to be done. That’s the beauty of open source, the sharing with a multitude of people and businesses around the world how things are created, verified, processed and kept at a protocol level. Especially when talking about blockchain, where its fundamental pretense is sharing data with the proper checks and balances before calling it truth. Wow! Tell me how that is not a perfect hand-in-glove match.

Open data and how you control openness

Speaking of data being openly shared, it’s already happening in some regards. We live in a world of real-time or near real-time data on virtually anything. And we’re all very accustomed to this as a way of life — we see it all time. Here’s a true story:

I recently went camping with a group of friends and our kids, and a buddy of mine has this flashlight that seems so bright it would burn the skin right off you. Well of course I had to have one just like it after he blinded me silly three times during the night. So, when I got home, I went online and browsed for a new flashlight. I found it but got distracted. When I got back to my computer later to check email, what ads do I see on the right side of my screen? The very flashlight I was looking for, available from several fine retailers, and at such-and-such a price. This is data that I’m already freely and openly giving away, then others profit off it by selling this information to advertisers. What do I get? Spammed. To be fair, I did find a really low price and coupon as a result.

Everything you do is being tracked by all the digital devices attached to you. They watch and record everything. It’s all data, and it’s got real value. As a consumer, wouldn’t you like to get some of that value back and also control where that data is used? Identity management with blockchain may seem like the opposite of open data, but it provides you with controls to the specific data you are producing and where it is shared. It also allows the possibility of putting a little coin back in your pocket. You can count me in!

Openness sometimes means sharing with competitors

Now, the biggest (and I venture to say the most difficult) aspect of all this openness is wrapping our minds around sharing with potentially “traditional” competitors. What does this mean in reality?

This doesn’t mean you invite your nemesis to your office, type in your password and point them to all of your confidential information. What this really boils down to is a major decision point for any business in this space, the determination of what needs to be controlled and how to do it with the greatest efficiency possible. Defining and understanding these dependencies will drive to evaluation of the features and capabilities, comparing the different protocols and implementations.

Take a basic supply chain scenario where you want to track shipments at any point from provenance to its final disposition. Can you do this today? Yes, no, maybe — it all depends on what systems are in place. There are a lot of suppliers that still use paper and pencil or outdated systems of record. Another more specific example to detail efficiency, money and even lifesaving uses for blockchain is in the outbreak of contaminated food.

Earlier this year, a massive retailer testified in front of congress, mentioning the benefits of blockchain in food trust. In 2016 there was a salmonella outbreak in peanut butter that took eight days to discover how and where the contamination occurred within the supply chain. This was partly due to the fact that everyone had their own system and tracked their records within that self-contained environment. They then had to reach out to the next person with their results, who in turn went through their records doing the same — so on and so forth. It was finally reconciled by someone that had to collate all the information.

To demonstrate how blockchain changes this landscape, the retailer testifying before congress described how they put all their suppliers on blockchain and worked together to reproduce a model of the same outbreak. They found the issue in 2.2 seconds. That’s eight days down to 2.2 seconds. Think of the lives and money potentially saved by this kind of efficiency — all driven by openness.

Infomercial moment: But wait, there’s more!

The most amazing part is that all of this is available today, the ability to have insight into everything — from the base fundamental approach of how the technology is built to the data transacting on the system. Along with necessity to work together, is the definition of openness and what blockchain is designed to be. This just gives a whole new world of virtually endless opportunities. All this from learning and leveraging the mass amounts of information that is perpetually being collected and worked on together.

There are groups and foundations out there tackling very difficult business, social and economic issues that we face today, and a lot of them in the open source community. Only you know the needs you have, so I urge you to go out there, get active and make sure you are heard. You don’t even need to be a technologist.

Solutions, products and technologies are built to solve issues and make life easier. Feeding in the needs and problems to this open system is just as needed as building the technology to drive us all forward.

Connect with me @MeetMarkP on Twitter to continue the discussion.

Deploy the IBM Blockchain Platform across multiple environments

Program Director, Blockchain - IBM Industry Platform

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