Ever since Blockchain made cover of The Economist in October 2015, it’s popularity has gone o the roof. Everywhere people are trying to understand this technology and how it might change the world.
I am not sure, yet, if Blockchain can change the world but it has a potential to make world a better place.
Brief Introduction of Blockchain:
We all have heard of ‘Bitcoin’ - digital currency. Blockchain (BC) is a technology that works behind Bitcoin. Essentially, BC is a database but it is distributed which means no central authority/database, making it a worldwide database.
It removes the middleman and makes transaction faster. Let me depict this here. As you can see, left side is traditional way of exchanging money and right side is the Blockchain way :
Other than making transaction fast, BC increases privacy, security, computing power, integrity. (Will cover these in other write ups).
But this distributed setup has its challenge as well.
For eg: Distributed cause lot of duplicacy and how can duplicacy be efficient?And this is all Peer to Peer which makes governance tough.
So, then BC does some thing which makes duplicacy efficient? I do not think so. I think duplicacy is still inefficient. But if BC can bring down administrative and other costs, that can counter for inefficiency caused by duplicacy, then we have a case for BC.
Public and Private Blockchain:
One can do Public and Private Blockchains.
Private BC works in Closed system - like traditional enterprises and will not be transparent. Public BC will be opposite.
I think we have more benefits with Public Blockchain such as Security, Resilience and Large Amount of Computing Power. I want to highlight Large Computing power because it plays a very important role in public BC. This is because say if one country like North Korea or say ISIS tries to throw in lot of computing power to manipulate BC, they cannot get 51% of computing power over rest of the world.
When coming to decide what you want to choose between Public or Private BC, technology is not going to be of limitation. It will be decided mostly from regulation perspective. For eg: Medical Records or Confidential Client records would not go in public.
I think to get benefits of Public BC and meet regulatory needs, semi-private BC is getting looked at as well.
Where is BC making its place (Implementation):
BC is still in experimental phase. Different initiatives/use cases are getting tried and new startups are coming up.
Here is a list of few cases that have been implemented and I am familiar with (I think you will find 3rd one really amazing):
Land Title Pilot on Blockchain in Republic of Georgia
Voting Infra in a European country (Launching next year)
SEC has approved Plan to Issue Stock Via Bitcoin’s Blockchain and overstock.com will be the first stock which will be traded. T0.com (which is subsidary of Overstock) has built this trading platform and attempting to reinvent financial market using blockchain.
In addition, One of the most active area of interest and research is Smart Contracts. It is believed that Smart Contracts can get adopted really fast in 2 places:
Derivatives Marketplace - BC will help to avoid Portfolio Reconciliation
M&A of Public Companies - Imagine transfer of shares after M&A approval in less time and so much cost savings
Blockchain and Vendors
The Future of Blockchain in Enterprises is maturing. Red Hat, IBM, Microsoft (and so many others) are doing significant work in this area.
Red Hat is working on Blockchain initiative and using leading Container Management technology - Red Hat OpenShift (https://www.openshift.com/dedicated/blockchain.html#apply) to operationalize Blockchain.
IBM and Microsoft are also working in their emerging labs to roll out offerings on Blockchain.
But let’s keep in mind that BC is getting matured, it does not mean it is complete.
In the end, I am not sure if Blockchain is making things really faster or is it because it removes regulations/middleman, things become faster.
But given it removes regulations/middleman, one thing required to make BC successful is - Political Will at the top.