Do you know that financial services sector has majorly driven the blockchain framework? Well, this general consciousness has made blockchain a potential game changer. We have been ardently following this technology and in our last post we discussed “Building Your Own Blockchain”. Keeping the legacy forward, in this post we will discuss the technology fundamentals in blockchain for the enterprise.
A shared digital ledger records transactions in a shared or private peer to peer network. Only distributed transaction record is appended which can be achieved by any SQL or noSQL database.
This ensures tamper-proof security, authentication, and integrity of transactions. The cryptography is so sturdily designed that it makes impossible for any adversarial process to break into the system. It is designed such that the cryptographic considerations can change when the ledger is translated to less democratic or permissioned ledger.
A consensus is trust system which defines a protocol where all the participants of a business network agree upon to obtain network verified transactions. These trust system uses the power of a network to verify transactions.
Business Rules or Contracts
Contracts sum up participant terms of agreements for the business that takes place on the network. These business terms are embedded transaction database and executed with transactions. The ‘Rules’ component defines value and state of transactions as needed by any business flow.
These four building blocks of technology promise to change the landscape of enterprises. For a full recap or to learn more about these, you can refer to our previous article here.
Why Blockchain adds value to Enterprise?
So what makes this technology so special? Why it is attracting massive investment and coercing enterprises to reconsider on their business models?
Next you will see is an exhaustive list that shows the value add that enterprises can have to make blockchain a consumable technology.
1) Auditing & Logging
Auditing and logging can be verifiably done with the help of blockchain technology. Purposes of non-repudiation, fraud analysis, technology root cause analysis and other enterprises systems which are crucial to satisfy regulated systems can be assisted with the technology.
2) Enterprise integration
This includes different systems on an enterprise to accept blockchain.
a. Integration with Incumbent System of Record (SoR) – Integration of Blockchain services with existing systems as CRM, reporting and analytics and business intelligence
b. Blockchain as a transaction processing system – This will reserve SoR as an ad hoc approach to adopt the blockchain technology
c. Design Intent – Blockchain is surely a path breaking technology. The designing of systems should be in such a way that the path followed is least disruptive enabling an accelerated adoption of the technology,
3) Reporting requirements
In order to adopt blockchain as a transaction processing system reporting and regulatory requirements is a very crucial step. To offload these requirements it is advisable to create connectors to existing SoR until blockchain is enterprise aware.
For purposes of high availability, pattern recognition, fault identification and capacity planning, monitoring is of utmost important. This will satisfy all regulatory compliance and generally accepted IT practices.
5) Enterprise AAA (Authentication, Authorization, and Accounting)
For enterprises, major scenarios are permissioned and hence all practitioners are assigned to roles. These roles can be identified and tracked to play a part in blockchain ecosystem.
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IBM Wants to Make 2017 the Year of Blockchain Enterprise Deployment
It can be projected that 2017 will be a breakthrough year for enterprise adoption of the blockchain. IBM is heading towards the development of enterprise-ready solutions that will focus on overcoming the limitations of technology in areas of scalability, confidentiality, performance, auditability, and privacy.
IBM is aiming at meeting the enterprise requirements and developing platforms to enable enterprise governance models and networks in which proper security and authentication are configured.
Recently, IBM has launched the first production of its large-enterprise blockchain. It is a program for IBM Global Financing which objects at solving transaction disputes. With this application, IBM has estimated that amount in dispute to be reduced from $100 million a year to $30 million also reducing average dispute resolution time from 44 to 10 days.
In the domain of blockchain, IBM has announced multiple enterprise deployments within and outside financial sectors.
- CLSNet, a payment netting solution for CLs Group’s foreign exchange market products and currencies.
- The smart contracts solution for Bank of Tokyo Mitsubishi UFJ.
- Proof of concepts including an end to end food traceability for Walmart, transaction management for Maersk, KYC solution for Crédit Mutuel Arkéa and consumer digital identity with SecureKey.
In addition, IBM has set up Bluemix Garages in major financial centers as a part of its cloud strategy to enable association with projections around Bluemix portfolio. Dedicated blockchain teams are present in four of the nine garages in the cities of London, Singapore, New York and Tokyo.
The London Garage team works through a Design Thinking Workshop.
Blockchain has remarkable potential and the value add is enormous when all its components are put together. Enterprise blockchain brings together transaction data, value and state close to business logic and security of business transactions. This will form trust to business transactions and conforms to regulatory compliances. Most importantly, blockchain is reforming trade systems, strengthening security and providing solutions to age-old industry concerns.
In the next article we will share detailed technical insights and know-how of implementing Blockchain enterprise wide.