The use of the Blockchain in Microsoft Azure.
Blockchain has recently been mentioned a lot in relation to cryptocurrency. At the end of 2017, at the beginning of 2018 all you could hear about was Bitcoin, but this application is only the tip of the iceberg. “For organizations, the Blockchain will cause a revolution in their validation processes and in many other areas.” This is my message to our customers.
“To know what the Blockchain in Azure can mean, it is important to have a clear understanding of the blockchain.”
Blockchain 1.0: Bitcoin
The first version of the Blockchain is easily recognized in the Bitcoin. There is a large decentralized network of computers that have all saved a copy of the ledger. A change takes place at one location, a selection of the total validates that change and ensures that all other computers are also updated when successful. Thanks to the many encryptions on the transaction, it is never possible to reduce the calculation and therefore also to forge the transaction.
“Now we know this way of recording transactions mainly from the trade in Bitcoin, which continuously records who owns which currency. But this technology can also be used to secure other processes. The sale of a laptop can also be included in the blockchain, so that it can always be traced who has become the owner of it. “
Blockchain 2.0: Ethereum
The development of the Blockchain does not stand still, as can be seen in the next phase of technology. Whereas Blockchain 1.0 only allowed for the encryption and recording of transactions, it is also possible to include bits of code in the Blockchain. These code pieces make it possible to make a ‘smart contract’ between two parties.
“With a smart contract you can set certain agreements to further automate the transaction.” “Take again the example of selling the laptop. It may be that a laptop can only be sold when a third party gives its approval. With Blockchain 2.0 we can also include this approval in the process, so that the laptop can only change ownership if the third party has also approved its Blockchain. By processing certain conditional codes in the blockchain, this type of transaction can save a lot of bureaucracy and minimize error margins. “
With Blockchain 2.0, there are three major improvements to the first version:
1. Entering a smart contract, as explained above.
2. Issuing tokens. A token can be used once or can only take effect when certain conditions are met. “Imagine that every voter in the Netherlands receives a token that can only be used on the day of the elections. This token can only be obtained and issued once and the election results are tracked realtime in the Blockchain .“
3. Validation through Oracles. The oracles can be bodies that can determine a truth. An example: the air conditioning may only be switched on when the outdoor temperature is above a certain limit. At a number of Oracles is asked what their measurement of the current temperature is, here is taken an average and this temperature is the truth at that time.
Blockchain 3.0: the role of the middle man changes forever
Often it is still the case that certain validations in processes take place externally. Think of a notary who has to check and approve papers. If all these matters can be recorded in the Blockchain, this validation is no longer necessary and the notary will have to adjust his or her services.
“The music world can also be turned completely upside down. Now a band can be happy when a record label wants to join them and they have to pay a large part of the income to the label. With the Blockchain they can release their own music and process a distribution key in every source of income: 10% for the singer, 15% for the guitarist, etc. The moment they need a kind of record label for marketing, they can demonstrate what the merits for the label are going to be and can explain the labels on the basis of registration why they are the best party to promote them. The power comes to lie with the persons who actually have the power .“
Three different forms of Blockchains can also be distinguished:
1. Public Blockchain. This Blockchain is clear to everyone and records all transactions. Incidentally, it is possible with blockchain 3.0 to protect certain sensitive information so that only the transaction itself is clear without naming the details.
2. Consortium Blockchain. A consortium can be set up between chain partners in a particular project. Are you building a house? Then set up a consortium Blockchain with the architect, contractors and suppliers to record all agreements and to take automatic steps in the process after approval of certain drawings or appointments.
3. Private Blockchain. A private Blockchain can be set up to record internal decision-making processes in an organization. This information is only available within the relevant organization.
Blockchain in Azure
Microsoft sees Blockchain as a big market in the future. They have indicated a lot to bet on Blockchain as a Service, BaaS. With these out-of-the-box solutions, it is even easier for organizations to use blockchain. “Think of so-called QHSE protocols. An unsafe or risky situation is detected and this signaling is recorded in the Blockchain. This means that a signal can immediately be sent to the relevant chain partners so that this situation can be resolved.”
“Blockchain is going to revolutionize how the world works”, “The role of the ‘middle man’ will change permanently and the power will lie with those who actually have the power. Even in organizations, agreements can no longer be forgotten or ambiguities arise about certain rights. The world is becoming even more transparent and that only offers perspective.”
