How blockchain delivers security and trust to startups
How blockchain delivers security and trust to startups by Ron Argent originally appeared on Blockchain Pulse
Anyone who knows the challenges of making a startup succeed knows that just having a great idea—even a potentially world-changing idea—is no guarantee of success. I founded Cognition Foundry in 2015 to help deserving startups bridge the gaps that can hold them back. We look at our mission as encouraging, empowering and equipping people to realize their dreams of making the world better.
Of all the technologies that have the potential to change the world, we see blockchain as near the top of the list. And in many ways it comes down to a single word: trust. There’s no better illustration of this than a customer of ours called the Plastic Bank. Founders David Katz and Shaun Frankson came up with an incredibly powerful vision of how to address two global problems—plastic pollution in the ocean and deep poverty in the developing world.
They proposed to use virtual currencies to build local, self-sustaining ecosystems where people could collect plastic waste and redeem it for monetary value. For one thing, it’s about cutting plastic pollution at the source, rather than piecemeal, band-aid approaches. But it’s also game-changing because it’s introducing something the world’s non-poor often take for granted but the poor often lack—having a safe and secure bank account.
Bringing confidence where it’s needed
That’s where trust comes in. For the Plastic Bank model to succeed, the people who bank virtual currency need to trust that their money will never be stolen or misappropriated. By the same token, the socially responsible companies that want to participate in the program by buying recycled plastic—companies like Henkel and SC Johnson—need to know that the process can’t be compromised by corruption, which is a sad fact of life in many undeveloped countries.
Blockchain was the answer. When people redeem plastic at a Plastic Bank collection center, they get digital tokens that are stored on their mobile phone in a digital wallet. What makes it secure is the fact that this balance—and all transactions affecting the account—are stored on a distributed blockchain ledger, which is both transparent and unalterable. That means it can’t be touched by anyone but the owner.
What makes the Plastic Bank reward system even more secure is the fact that we chose to run it on the IBM LinuxONE cloud platform. By using LinuxONE and blockchain, we were able to guarantee a level of security that we didn’t see anywhere else in the market.
Like any startup with big ambitions, Plastic Bank also realizes that other IT issues—like scalability and cost—are critical to its success in changing the world. The big benefits of LinuxONE are its ease of use, resiliency and massive vertical scalability, as well as much lower development and maintenance costs.
Changing lives with Blockchain
While putting the solution together for Plastic Bank, we decided to tap the expertise of the IBM Garage team and used IBM Design Thinking to visualize a solution based on blockchain technology. The IBM Garage had architects, developers and designers with the blockchain expertise we needed to validate our solution.
We developed an ultra-secure, scalable reward system—a blockchain banking platform—that uses the Linux Foundation’s Hyperledger Fabric, deployed and managed as part of the IBM Blockchain Platform, running on IBM LinuxONE servers on the IBM Cloud. The system is now fully deployed and working in Haiti, Indonesia and the Philippines.
More recently, we engaged the IBM Blockchain and IBM Garage teams again to help us plan for current and future growth of the platform as we expand to additional countries. We also explored the latest capabilities of the underlying Hyperledger Fabric and IBM Blockchain Platform technologies as we continue to improve the platform.
Trust as the prerequisite for change
Cognition Foundry is focused on helping other companies make a difference. Speaking from this perspective, I’d say blockchain technology has done nothing less than open up a whole new world of opportunity for us where trust and security are critical—which is just about everywhere.
Whether it’s a new digital ecosystem like Plastic Bank or major financial institutions, supply chain or manufacturing provenance, trust and transparency are the foundation of transformation. As we continue to help startups work toward a more open and empowered world, we expect blockchain technology to be front and center in our efforts.
Watch how Cognition Foundry is able to guarantee Plastic Bank a level of authenticity with IBM LinuxOne and IBM Blockchain: