WTF is an Enterprise Blockchain?
Until recently, blockchains have been the domain of developer groups, building protocols to power a decentralized world. These represent public blockchains, often open-source and community driven.
As the technology develops, large corporations have taken an interest, and begun building their own private and permissioned blockchains to manage everyday business operations. These enterprise blockchains have exploded onto the business scene, and are set to disrupt the way in which companies operate. However, as with any new technology, it may be a while before it’s full potential is realized. Technology futurist Jeff Stollman believes enterprise adoption is still in its infancy. “Blockchain’s potential in the enterprise is immense, but major blockchain applications for the enterprise are still years off,” he stated in a recent interview.
Tech giants like IBM are leading the charge in enterprise blockchain adoption, already supporting hundreds of businesses with their blockchain implementations. We are constantly discovering new use-cases for blockchain in the corporate environment, including supply chain management, financial settlements, health and safety monitoring, cross-border trade and biometrics integration. Ajay Chidrawar of business application firm CGS works with customers looking to integrate blockchain into supply chain management: “From the supply chain perspective, blockchain can be an enabler of trust between trading partners as well as with consumers,” he says. “Consumers are going from blind trust to a full understanding of the journey.”
A recent report from Forbes revealed that the top 10 companies worldwide are now investigating blockchain technology, including Pfizer, Apple, and even Bitcoin-detractor Warren Buffet’s investment firm Berkshire Hathaway.
So how does blockchain assist the day-to-day running of a business?
Distributed ledger technology offers benefits beyond what was previously available in the business world. Three fundamental characteristics of blockchain: 1. Censorship resistance 2. Trustless transactions and 3. the ability to audit and verify history. Transactions previously requiring human involvement, subject to manipulation and corruption, can now be carried out automatically and with complete security. Businesses can automate processes that previously required costly overheads, such as staff or third-party interaction.
Information has become one of the business world’s most valuable commodities, and the ability to affordably and securely manage it is a top priority for any enterprise. Blockchain technology is poised to completely restructure the business landscape and present new and innovative ways to manage day-to-day operations. Cost efficiency, transaction security, fraud reduction, information transparency, and customer loyalty development are among of the few benefits realized through blockchain integration.
How are companies adopting blockchain?
With vast amounts of sensitive data being transacted daily over the internet, security certificates have become an integral part of the enterprise banking sector.
Previously, expensive and often corruptible third-party Central Securities Depositories were used to store stock certificates. Blockchain technology is now being explored by the Industrial and Commercial Bank of China (ICBC), the largest corporation in the world, as a means to replace these depositories and store certificates more securely and cost-effectively.
German automotive giant Volkswagen is currently working with IOTA’s ‘Tangle’ technology to develop a network for communication between vehicles. ‘Tangle’ uses directed acyclic graph (DAG) technology, an alternative to traditional blockchains, to run multiple network chains simultaneously. Volkswagen hopes to leverage the technology to share remote updates securely amongst smart vehicles.
IBM has partnered with non-profit organization Stellar to build the Hyperledger Fabric platform that provides enterprise blockchain solutions to financial institutions. The system offers banks and similar financial corporations the ability to quickly and efficiently clear and settle cross-border payments and remittances, as well as utilize smart contracts, consensus algorithms, and identity management services.
In a discussion regarding blockchain, IBM’s Vice President of Blockchain Technologies, Jerry Cuomo said, “There is an entirely new way for businesses to interact — it is awesome and as this takes root it will be revolutionary.”
Leading industry groups have formed consortiums such as the Enterprise Ethereum Alliance (EEA) and R3 Fintech Consortium to work together on collectively beneficial blockchain projects. R3 has involvement from 200 of the worlds largest banking corporations, including Goldman Sachs, JP Morgan, Deutsche Bank, and HSBC.
These are just a few examples of how blockchain has infiltrated the enterprise sector. Adoption is accelerating at an alarming rate, as the possibilities of blockchain implementation expand. It’s possible we’ll see blockchain become as synonymous with business as the Internet itself.
