Blockchain News

Blockchain: Really Good For Business

We’ve all heard of Blockchain — it’s a current buzzword that has moved beyond tech circles and gone mainstream. And if news reports are anything to go by, the rise of Blockchain seems inevitable, given its association with cryptocurrency, of which Bitcoin is most familiar to all. To be clear, these are related but cryptocurrencies are only one example of all that Blockchain can accomplish.

But what is Blockhain exactly? Briefly, Blockchain is a distributed and shared ledger that records transactions in a way that is immutable — and this holds very interesting implications for the ways in which companies operate. We met with the IBM Centre for Blockchain Innovation Lead, Shantanu Godbole, to glean some insights on how this promising technology is being developed for business applications

What is your organisation currently doing to prepare businesses for the advantages (and navigating the pitfalls) of Blockchain?

Blockchain is about business practices; it is about transactions; it is about back-end business-to-business processes — and all this is totally up IBM’s alley. We are the foremost Blockchain player, and it is not only us who’s saying this (CNBC recently published a story citing IBM’s leading role in Blockchain). The entire source code that the most prevalent Hyperledger Project (the main governance and development entity for Enterprise Blockchain) codebase called Fabric uses was donated by IBM; we now maintain about 50 percent of this as other players have stepped up to develop the source code. 

Now, Blockchain is still a hyped-up technology (where real-world applications are) still at the proof of concept or pilot stage. It is an open question as to when it will have a truly transformative effect,  although by the end of 2018, we should be seeing the first examples of major enterprises deploying Blockchain-based applications and solutions and some have already started.  

Where are we likely to see Blockchain technology being deployed?

Blockchain won’t be affecting end consumers directly. For example, the way people do their banking won’t change, but the ways in which banks communicate with each other might. You’ll find Blockchain technology in the supply chain, and in business-to-business communications. As of last year, we believe Blockchain platforms are ready for business applications because it is stable and enterprise-ready. 

Any interesting examples to share?

One of our local contributions here is the Hyperledger Composer, to help business users start their journey on building Blockchain applications of their own. We have a team in Singapore called the IBM Bluemix Garage for Blockchain. It operates like a global consultancy with the DNA of a startup that combines the best practices of Design Thinking, Agile Development and Lean Startup to accelerate application development and cloud innovation. The Garage also serves as a hub for developers, product managers and designers to come together to rapidly design and develop successful applications on Bluemix. 

One of our regional Blockchain-based pilot projects is in Thailand, where Krungsri Bank partnered with the IBM Cloud Garage team to streamline the bank’s contract management process across all its offerings. The end result was increased operational efficiency, transaction transparency, and information security. 

The unbanked issue is something that experts feel Blockchain may be able to address. Can it indeed help to promote financial inclusion?

Well, what we considered is the situation of a domestic worker here remitting money to the Philippines, for example (where this person might lose money in the transaction). The situation is worse when it comes to Pacific Island countries, where a worker may lose up to 30% of their earnings when they transfer money home thanks to a variety of processing fees. Transactions in different currencies can also require multiple intermediaries and take days or weeks to complete. 

We have a solution here, with a partner, to use the Blockchain to ‘disintermediate’ intermediaries and get rid of paperwork (thus reducing the cost of transferring the money). This solution is called the IBM Universal Payment Solution, and it has gone ‘live’ in seven Pacific Island countries right now. It is a new blockchain banking solution that will help financial institutions address the processes of universal cross-border payments, designed to reduce the settlement time and lower the cost of completing global payments for businesses and consumers. 

Given that Blockchain is very new to the vast majority of the public, and the business world at large, how can we start a productive conversation about the potential of Blockchain?

A few years ago, we would have been talking about Blockchain for the sake of Blockchain, while reiterating that we do not do mining (the process of creating tokens for any given cryptocurrency)! Now, we feel the best way forward is the engage clients about their pain points, and to discuss use-cases. People today do understand that there is an opportunity here, so companies are interested. This is especially so when we tell them we can help them to manage costs. It is now the use-case scenario that people are interested in — we need only mention Blockchain when they ask how it can be employed.

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