April 29, 2016 | Written by: Jerry Cuomo
Share this post:
While many people have heard of the crypto currency called bitcoin, what’s more interesting is the underpinning technology that makes bitcoin work, known as blockchain. Industry analysts are calling blockchain “revolutionary.”
Blockchain allows industries, organizations and their customers, partners and suppliers to build dynamic new business networks for conducting transactions of all kinds. Blockchain can help simplify how companies conduct business with their supply chains, trading partners, customers and others in the ecosystem within an industry. For regulated industries — such as government, healthcare and financial services — blockchain has the potential to provide an additional level of security and trust.
To help speed the adoption of blockchain for business, IBM today is launching new services on the cloud to help developers quickly build blockchain applications on any cloud, on any device, while helping their businesses quickly host secure, tamper-resistant blockchain networks.
There is a real sense of urgency among organizations pioneering the use of blockchain. These companies are eager to begin their first blockchain projects, but most need help to define the ideal cloud environment for blockchain.
Blockchain networks are built on the notion of decentralized control, but some blockchain cloud services leave back doors open to vulnerabilities that allow the blockchain to be tampered with or controlled..
And while regulations governing the specific use of blockchain applications in different industries may be a few years out, start by putting blockchain networks in secure clouds that comply with industry standards.
The potential use of blockchain exists across a wide range of industries. They include:
- Trade finance: By using a blockchain, all parties — financiers, trading houses, and any other trusted intermediaries — are able to see when the goods have shipped and can release the funds at the appropriate time.
- International payments: Moving to a blockchain should shorten settlement periods, speed up transactions and reduce the risk of fraud. This becomes even more important as intra-country payment systems increasingly move to real-time, including the U.S. next October.
- Electronic Medical Records: Health records are held in data centers on the cloud where hospital and care provider networks have limited access. Centralization of the private information is expansive and makes it vulnerable to security breaches. By using blockchain, patient data can be stored on a blockchain network with access by multiple doctors. By storing EMRs on blockchain, patients can authorize access by individual healthcare providers or hospitals.
- Industrial Manufacturing: When something goes wrong with a complex industrial system — such as an aircraft — it’s important to know the record of origin of each component part. Blockchain provides every physical product with a digital “passport” containing complete provenance details of each component. This creates a transparent record for all parties, including government regulators.
- Real Estate Land Titles: Governments and citizens have been concerned about the rightful ownership of property for centuries. Instead of transferring payment for property through an escrow account, by using blockchain, buyers would use a blockchain to send payments, creating an expedited and more secure method for transferring property ownership. The buyer and the seller would sign the contract with conditions already laid out digitally and the value, as well as ownership of that residential property, would be transferred.
- Auto Insurance: One use case for smart contracts involves vacillating insurance rates for vehicles. With smart contracts in a blockchain, an insurance company could charge rates based upon where and under what conditions customers are operating their vehicles. A car driven on a clear day (according to weather condition information obtained from a weather service), in an area where all the roads are repaired, (according to the Department of Motor Vehicles information about road repairs), would be charged a lower rate than a car that is operated in a storm or on a pothole-filled road.
Businesses do not exist in isolation. They are connected to customers, suppliers and partners. They exist in countries around the world and have to comply with regulations. The networks are not static. Over time, they morph because of business acquisitions and mergers. Finance, risk management, healthcare, insurance, and the Internet of Things (IoT) are some of the other systems that are poised for dramatic change using blockchain networks.
What Is Blockchain and Why Do I Need It?
How Blockchain Will Transform Business and Society
Reinventing Securities Trading With Blockchain
How Businesses and Governments Can Capitalize on Blockchain
Blockchain: It Really is a Big Deal