Bitcoin is the world’s leading virtual (or crypto) currency and it could take me more than a couple of pages to explain exactly how it works. Suffice to say that, without trust, it wouldn’t represent $14bn in wealth, despite being based on nothing of any tangible value.
The principle of trust is central to the technologies that enable businesses to become more digital. Trust allows everything from software applications to cloud networks to get along coherently, safely and autonomously. And that’s especially important to every organisation as the ‘Internet of Things’ evolves to incorporate many more machines and endpoint devices.
All of this makes Blockchain - the technology underpinning Bitcoin - a potentially game-changing opportunity for all digital businesses
Blockchain gets around the problem of having to keep a ‘single picture of truth’ centrally updated. Rather than operate as a traditional database, Blockchain is a kind of distributed ledger technology. It overcomes the performance challenges associated with big centralised systems by using a small amount of the processing power of every system in the Blockchain network to validate every new group of transactions, six times an hour, 24 hours a day. And it’s highly secure; to perpetrate fraud would require a herculean effort against the entire structure. No wonder some commentators compare blockchain to The Matrix.
Author Don Tapscott describes it as “...basically a distributed database; a giant global spreadsheet that runs on millions and millions of computers; open source, truly peer-to-peer...and uses state-of-the-art cryptography… It’s an immutable, unhackable distributed database of digital assets. This is a platform for truth and a platform for trust. The implications are staggering, not just for the financial-services industry.”
While Bitcoin was the initial beneficiary of Blockchain technology, it’s open source nature has given rise to several platforms that extend its use into non-currency applications. The most commercially successful of these platforms are Ethereum and the Hyperledger Project.
Blockchain is attracting a lot of attention in the healthcare and pharmaceuticals industry with initiatives such as The BlockRx Project.
The BlockRx Project’s mission is to “verify and enhance the integrity of the drug supply chain and accelerate new drug development...” by harnessing Blockchain technology to support the pharmaceutical development lifecycle.
Blockchain could also have a big role to play in utilities, keeping track of usage as well as payments. US telecom giant Sprint recently announced a new foray into Blockchain solutions that may signal the beginning of a technology revolution in one of the most data-heavy industry sector.
The practical applications for Blockchain technology across virtually all industries become clear when you consider that this decentralised, efficient, secure, validated record-keeping system can be applied to any data that needs any kind of processing.
Some of the more obvious examples include:
- Proof of ownership (property, stock, other assets)
- Proof of contract (agreement to purchase, marriage, birth, death)
- Proof of attainment (professional qualifications, driving license, tax paid) 4.Proof of disclosure (insurance claims, election voting, will and testament)
Another major subset would be Proof of Action. This could include anything from medical procedures, accidents and drug prescriptions, to a host of supply chain activities such as stages of manufacturing process or delivery completion of finished product.
Taken to the extreme, the principle of decentralised database record-keeping extends to any exchange of information between machines, regardless of whether they concern people or not.
Blockchain innovation is still its infancy, and there are still many who regard its radical approach as too much of an unknown to risk commercial deployment yet. What is clear is that huge investments are pouring in to prove new business cases and allay these concerns. It might be sooner than you think before your data is being processed in a Blockchain, or before your business harnesses its power.