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Well, a year+ ago, one of the latest and greatest hypes in IT was blockchain. And, as always with new IT trends, it took a while to get from the hype into a real-life production environment.
First things first, blockchain, a quick refresh. To start off; it’s not a product, like the internet isn’t a product. It’s a technology platform, if you like, where transactions among partners in a business context can take place. If you want to zoom in on its goodies, it’s good to know that in a non-blockchain situation every individual party in a business network has its own ledger. So, if a manufacturer wants to ship products to it’s clients, it’s bank, a transporter, the transporter’s bank, probably customs, the bank of the receiving party and so on, are all duly writing their actions into their ledger.
With blockchain, there’s a shared ledger. Only one.
That simplifies things, but as there are no free lunches, it introduces new things as well. One of those being that humans (well, maybe not all) aren’t particularly good at trusting each other. Especially when money involved. That is why ledgers were created in the first place. I once heard an accountant claim that keeping track of ledgers is the one-but oldest profession in the world. Well, here you go!
So how do you establish trust in a shared ledger where everybody in the business network has access to. You might say: “Thou shall not counterfeit”, and hope the best of it. No, that’s not good enough.
A more secured way of doing that is to make sure that no one can alter data once added to the ledger. Every entry has been secured by encryption, based on the previous entry, which was encrypted on its predecessor, and so on.
Before the business partners are putting secured entries in the blockchain, they have established a set of rules describing under what circumstances they may, or may not, put an entry in the blockchain.
Although blockchain has been around for some time now, it hasn’t yet been used extremely widely in corporate institutions on a global scale. Furthermore, like I mentioned earlier, blockchain isn’t a product. There are many implementations of blockchains, every one of them claiming to be the best, no doubt. The technology base of blockchain has been donated to the open source community, so for everybody to pick it up.
A couple of weeks ago seven major banks, called the Digital Trade Chain Consortium, has announced it’s to use IBM’s implementation of blockchain, using the Open source Hyperledger Fabric. And that is good news!
IBM has a long and strong relationship with banking and banks around the world. We know what transaction processing is (IBM’s transaction software is used approximately 2 million times every single second). We know that scaleability is a funny little thing that needs to be there although nobody cares. From the beginning. And when it’s needed and hasn’t been designed, you’re in deep yoghurt. And then, everybody does care.
Another aspect is security. As mentioned above, the trust amongst partners must not be breached. So security is another strong requirement.
The Digital Trade Chain Consortium is going to use IBM’s blockchain in the IBM Bluemix Cloud, obviously. What you do not see in the press announcements is that it runs on an IBM LinuxOne machine, built on mainframe technology. This linux-only piece of hardware knows how to scale. The whole design of the LinuxOne is that not only processors are easy to add (on the fly) but the whole I/O and memory is extremely flexible. You can stress this baby up to 100% CPU utilisation and nothing will break. The I/O memory easily scales with the workload.
On the other big topic, security, the LinuxOne box is unparalleled. Of course, all blockchain implementations are secured, but the LinuxOne environment can do it better. Not only are the CPU’s capable of applying cryptographic actions faster than any other CPU, the box itself holds specific encryption hardware to accelerate security activities.
The combination of the most reliable hardware platform, unprecedented security and unmatched scaleability must have been recognised by the banking consortium.
This blockchain is not yet in operation, but will be before year end.
I’m looking forward to its implementation and its performance.