Blockchain Technology - Disrupt everything
Blockchain Technology - Disrupt everything
I hate the word "disrupt." It drives the implication that an entire industry is capable of being interrupted or completely tossed on its head. Instead I substitute that word - I prefer to think of it as an evolution. Netflix didn’t disrupt watching movies and tv, they evolved that experience and forced others to keep up. Blockchain technology is a bit different than a company like Netflix. Netflix evolves an industry, and doesn’t reach far beyond that. Visa wasn’t shaking in their boots; USPS didn’t feel the competitive pressure; The Mayo Clinic felt comfortable resuming operations as normal. No one forced them to evolve. Their industries were safe and quarantined from the pressure of Netflix. That makes sense, right? The difference between Netflix and Blockchain technology (and the reason you’ve probably heard "disrupt" more times than you’ve ever wanted to), is that the Blockchain is a tool, like a Computer or the Internet, and has the potential to be the driving force of evolution in many industries.
So, what’s going on?
Most of you have probably heard of Bitcoin, some have maybe even heard of Ethereum, and even fewer of Ripple. Most of these only ever receive press when their value breaks another crazy number, $500, $1000, $4000. But no one ever talks about the applications that are being developed with the Blockchain protocol.
Assuming you’re at least familiar with the inner workings of the Blockchain, you can understand that one of the more exciting things about it is the new capabilities it opens up for enterprises. Imagine wanting to track a product that’s changed hands dozens of times along a supply chain. Just thinking about requesting information from multiple companies is enough to make my temples throb. Each company would require you to file a request, then if it gets approved, you have to wait weeks until someone is able to dig the information out of their database and then transform all that information into something that’s easily readable. Now imagine if the entirety of that data was stored by each company (encrypted so they couldn’t view anything they’re not supposed to) and they could just internally look up the path of a certain product, or who signed off during a step of the way. We could imagine that, or instead we could look to the companies already joining forces to make that a reality: Nestle, IBM, Walmart, Unilever and others.
This is one of the most exciting developments on blockchain technology that I’ve heard of for a lot of reasons. It has multi-billion dollar corporations, working together, creating a transparent ledger, and tracking food in a way that can help make the food supply chain safer. That’s not just an uplifting story, but also a huge advancement in the way technology is being used in businesses. Hopefully it’s enough to get you thinking, "How would all that work? Why is it better? What else could the Blockchain be used for?" Because that’s the exciting part.
How does it work?
I won’t claim to know the totality of the IBM solution proposal for this effort, but I can guesstimate how it might look. From the beginning, each participant along the food supply chain would act as a "node" in the blockchain. Which means that everyone would have to host a server that keeps a ledger of all transactions. Now, some of the transactions might have some confidential information (like a special price that the farm is giving to Walmart and not Target based on the amount of the bulk order). Even though Target would also be a host on that blockchain, the information can be encrypted so that only people with the proper permissions are allowed to view the information. How does all this happen? Well, each item, or crate of items, is given a unique ID to be tracked along each entry in the chain. Once the item arrives and leaves another entity in the supply chain, that transaction (and some information such as health and safety compliance information) gets uploaded to the blockchain and made available to every member thereof.
That’s the (theoretical) gist of the implementation. Now you’re all experts who can take the idea and implement it yourselves.. not really, but hopefully that explanation made sense and gives an idea of the capabilities IBM is offering here. You have a distributed database of every transaction that items have made along a supply chain, with privileged information only accessible by permissioned users.
Why is it better?
Hopefully I’ve convinced you that this is better than having food that is hard to track. Because who likes questioning where their food came from? But why is this method specifically better? A few reasons:
- It’s more secure; Having a distributed database where only authenticated users can submit blocks allows it to be immutable. No one can hack a company and change the information on the blockchain, or submit a fake entry without it being very obvious
- It’s shared; Not just like a file you emailed to your co-worker is shared. But like a Google Doc is shared. You don’t have to email anyone to make sure you’re looking at the most updated .docx file, you can just look at the Google Doc and know that it is the most up-to-date, as well as see the changes made
- It’s transparent; Companies aren’t relying on the word of another company that those turnips were picked in Chile instead of Venezuela.
Blockchains aren’t going to upend the way we ship food to each other, we won’t suddenly strap rockets to the bottom of individual turnips and shoot them to Walmart, but it does evolve the shipping process to be better, and smoother.
What else can it do?
Everything! Well that’s what the hype would have you believe. My colleague Chris Bunch has previously discussed his views on the opportunities that blockchain hold. Sure, blockchain technology is widely applicable and it can do a lot of things, but it’s probably not always best. It has some great applications that are already being scoped out, though. It could give verifiable traceability of diamonds. Which some companies "claim" to do, but obviously are not doing very well, or very honestly. It could give banks the ability to work seamlessly with insurance providers to offer policies without the hassle of trading questions and answers back and forth to ensure all policy data is captured. It can provide autonomous vehicles a way to securely, and automatically pay at the pump when refueling.
The Blockchain can do a great many things, and that’s why you hear so many techies (myself included) ranting and raving about the possibilities. We’re all just so excited! The Blockchain won’t replace everything though, sometimes a good old fashioned LAMP stack is all you need. The biggest hurdle currently is building a community of qualified experts in the technology. It takes a matter of years before true gurus spring up, especially when you create a completely unique architecture, and a brand new coding language. We all just have to be patient for our flying, autonomous, self-refueling, blockchain, cars.
To wrap up
Now that we’ve zipped through a "How, What, Why?" of the blockchain, I won’t hope that everyone is an expert (perhaps that’s better left to a prologue to this post), but I will hope that I was able to shed some light on more concrete applications of blockchain technology. There’s a lot of cool applications being tested out on the fringes of the technology sector, and hopefully soon they’ll become more mainstream. I think the financial sector and supply chain industries will be the early adopters of Blockchain technology. Overall, I’m excited about the future that blockchain is shaping, it has great potential to make the world a much better, more transparent, place.
Read more about blockchain in Chris Bunch’s "Blockchain – Revolution or just another database?" blog post.