Blockchain’s potential for eliminating costly intermediaries, greater accountability through reliable record keeping, and innovative data-sharing networks has the attention of businesses of every size. One of blockchain’s most exciting breakthroughs is the smart contract. These programs automatically execute pre-defined instructions once specified conditions are met. Smart contracts allow users to engage in a variety of programmable agreements, removing the need for officiating third parties. Reduced cost and automative efficiencies have a massive appeal in every sector. Since an unorganized collection of independent parties have proven the use of blockchain and smart contracts for creating and transacting cryptocurrencies, everyone from SMB and enterprise, to the public sector wants to be involved.
What is Blockchain?
Blockchain is a method for keeping a reliable record of transactions within a distributed network, whose participants may not all trust each other. Multiple un-related parties validate each transaction in a block and link it to previous blocks with a cryptographic hash. Consensus algorithms are used to ensure that each copy of the ledger is identical without the use of a central authority. Although there are many parties validating transactions, only one of them is chosen to produce any given block, and no one knows who the next block producer will be. In this way, a reliable record is created by a collection of individuals and organizations who wish to reap the benefits. A significant difference between blockchain and a traditional database is that blockchains are write-only; information may not be altered once appended to the ledger.
On private-permissioned blockchains, an association of organizations are responsible for authenticating transactions and who is allowed to transact within the network. On a public-permissionless blockchain, such as bitcoin, a group of potentially adversarial parties (miners) compete to gain a reward from producing a block and ensuring its integrity.
Decentralized Digital Identity
Last March, SecureKey Technologies began working with leading financial institutions to create a blockchain-based digital identity network in Canada. They’ve built an identity solution with IBM Blockchain and The Linux Foundation’s open source Hyperledger Fabric. This service allows its users to verify identity securely, only revealing identity data as needed and with strict consent. Rather than storing the identity data, this network connects identity owners with trusted institutions who validate identity without revealing more than necessary; eliminating central repositories (honeypots) of identity information.
Last fall, IBM joined the Decentralized Identity Foundation (DIF) to collaborate on global standards for decentralized identity; joining the ranks of the Sovrin Foundation, Microsoft, Hyperledger, R3, Accenture, Mastercard, and others. All members of the DIF share the goal of developing "an open source decentralized identity ecosystem for people, organizations, apps, and devices.”
This April, IBM joined the Sovrin Foundation as a Founding Steward. The Sovrin Foundation introduced Project Indy to the Hyperledger family for the common purpose of developing standards, software solutions, and networks for decentralized identity. SecureKey, Indy, other DIF members, and the United Nations are all working individually and cooperatively to provide identity to the world while developing standards with the W3C so that these services are interoperable.
Greenstream is using a slew of Hyperledger products in the development of a supply chain for the emerging legal cannabis industry in Canada. Greenstream is creating the architecture to ensure regulatory compliance, real-time oversight, and a permanent record of each transaction.
Greenstream’s platform enables producers, merchants, consumers and regulators to transact, track, and authenticate the movements of legal cannabis through all levels of the supply chain.
MonetaGo developed India’s first enterprise blockchain network for multiple financial services organizations that is currently in day-to-day use. Built on Hyperledger Fabric, their product suite adds efficiency and security to banking practices and financial products. Among MonetaGo’s notable projects is their platform enabling a network of independent lending firms to securely share information, and reduce fraud.
“This technology enables us to work together with the other exchanges to achieve shared goals without sharing specific data.” -Mr. Kashinath Katakdhond
Room for Distruption
The potential for reliable record-keeping, information sharing, and automated transactions is enormous. Beyond all of the hype, the business applications enabled by blockchain are incredible, and the marketplace has barely scratched their potential. The doors to digital innovation have never been more widely open; we are now in a connected age and have the protocols to become more securely interconnected. Anywhere there are costly intermediaries performing a service that could be automated there is room for disruption.