Known as the currency of the Internet, bitcoin—the distributed, worldwide, decentralized digital money—has been dominating the news in recent times. However, now garnering just as many column inches is that of the digital currency’s underlying technology: Blockchain.
The role played by blockchain is undoubtedly critical to the function of a digital currency. As the protocol for developing a historical record of the value transaction passed between multiple parties, this distributed ledger technology is fundamental to its operation, yet has remained relatively under the radar until now.
So why the low profile? It could simply be down to blockchain’s intangible nature. Being the behind-the-scenes process that it is, leaves users totally oblivious to its intricate workings. Additionally, one could argue that it does not constitute a new technology; instead it represents the realization of existing components combined in different ways. Whether it is considered new or not, it is still poised to become one of the most disruptive of all emerging technologies.
A significant step forward for blockchain has been how businesses have started to wake up to its broader scope beyond that of underpinning a crypto currency. A greater understanding is now developing of blockchain’s potential role in revolutionizing the way we exchange and manage large volumes of transactions, with vast implications for core operations such as supply chains and customer relationships.
A smart platform for smart contracts
Thinking of practical use cases for blockchain, smart contracts immediately spring to mind. Industry is currently seeing an explosion in their use, moving on from the traditional domain of finance, to multiple other industries keen to improve their digital partnerships and asset transfer processes.
The self-automated computer programs have the ability to carry out the terms of any contract, without the time-consuming and expensive bureaucracy that is all too well known in these processes. It does this by removing the middlemen such as lawyers, who traditionally have a role in verification. Two anonymous parties can therefore do business with each other over the Internet, with heavy duty encryption providing the necessary trust element. As it is not possible for recordings of transactions to be altered, the risk of tampering from third parties or human error is eradicated.
Another most pertinent application is that of foreign aid donations. Blockchain’s enhanced transparency and traceability has major repercussions in a field that has often been criticized due to the lack of visibility into where donated money ends up. Blockchain provides the ability to trace exactly where the currency is being spent and by whom. The visibility that ensures the donation reaches the intended end-user can be a key driver in building trust amongst donators, encouraging them to donate more and even enabling funders to target key outcomes more effectively.
We should also consider the inroads that blockchain is set to make in healthcare, hailed by some as the silver bullet for the sector’s interoperability challenges. Perhaps not the silver bullet, but with both privacy and cost-cutting paramount, this technology could be invaluable when used, for example, to manage patient contracts for health plans. The automatic verification and authorization of their confidential information not only provides greater peace of mind, but puts an end to some of the inconsistencies and uncertainties over what has or hasn’t been paid, driving efficiency and curbing administration costs, both key drivers for healthcare providers globally.
Middleware: the missing link
While the case for harnessing blockchain is certainly compelling, setting up this technology comes with an inherent complexity. As a concept that is underpinned by partnership and collaboration, the need for middleware that supports integration, correlation, and analytics as well as driving security and governance must be a major consideration for anyone embarking on a blockchain project.
The first hurdle is that many different data sources must come together with the rest of an enterprise’s architecture in real-time. Blockchain is continually generating technical and business information that can offer valuable insights, ranging from fraud detection to user behavior, throughout the blockchain transaction. This makes the tools that can visualize the insights core ingredients for quick and simple data gathering and enhanced predictive capabilities.
Complementing this is data discovery software that can also drive historical insight on blockchain. Crucially, this adds another element that continues to evolve the simple tracking and exchange of assets around a business, to become a smart network in which greater innovation, discovery and enhanced communication can be achieved.
The benefits that can be realized are indeed wide-reaching. Not least that groups that were previously siloed and disconnected within an organization—or even an entire industry—can securely converge on the same information. In addition to connecting those parties, major efficiency gains and cost benefits are there to be taken, as the organization and its network of partners can work together automatically across multiple intelligent devices.
While much excitement surrounds the technology that is driving the Fourth Industrial Revolution, success hinges on how that game-changing technology is applied and managed. This rings true for blockchain. In order for organizations to truly leverage blockchain events, they must be able to fully analyze, correlate, and act on these events, otherwise there will be a critical missing link.
Want to learn more? Join us for a webinar to go Beyond Bitcoin with Blockchain. More information and registration here. Read more about the TIBCO solution for blockchain.