IBM continues to push blockchain. Its latest announcement on the subject, Three Blockchain Adoption Principles Essential for Every CEO, came early this week. The basic pitch: in certain market segments blockchain could potentially help save billions of dollars annually and significantly reduce delays and spoilage. Citing the World Economic Forum, the company adds: “reducing barriers within the international supply chain could increase worldwide GDP by almost five percent and total trade volume by 15 percent.” That should be sweet music to any C-suite exec.
In a related announcement also this week, IBM Japan, Mizuho Financial Group, and Mizuho Bank are building a blockchain-based trade financing platform for trade financing. With the platform, Mizuho is aiming to streamline trading operations and improve supply chain efficiency. The resulting timely and highly secure exchange of trade documents turns out to be essential for stakeholders in the supply chain ecosystem. Digitizing trade information on a blockchain can help alter the way information is shared, infusing greater trust into transactions, making it easier for parties involved in the supply chain, including exporters, importers, shippers, insurance companies, port operators, and port authorities to share critical shipment data in near real-time.
IBM is emerging as a leader in secure open-source blockchain solutions built for the enterprise. An early member of the Linux Foundation’s Hyperledger Project, the company has worked with more than 400 clients across multiple business segments to implement blockchain applications delivered via the IBM Cloud.
DancingDinosaur has its own 3 reasons enterprise data center execs should be excited by blockchain. They are different and more z-centric than IBM’s. First, you probably already have a z System, and the z’s legendary security, availability, and scalability make it a natural for blockchain. Second, the z already comes optimized to handle transactions and most of your transaction data already lives on the z, making it very efficient from a processing standpoint. Third, until or unless your blockchain grows to some enormous size, it will barely consume any system resources or generate overhead. In that sense, blockchain on your z comes virtually free.
The following blockchain principles are based on IBM’s customer experience:
- Blockchain has the potential to transform trade, transactions and business processes: The two concepts underpinning blockchain are “business network” and “ledger.” Taken together, these are what make blockchain a smart, tamper-resistant way to conduct trade, transactions and business processes. Network members exchange assets through a ledger that all members can access and share. The ledger syncs across the network with all members needing to confirm a transaction of tangible or intangible assets before it is approved and stored on the blockchain. This shared view helps establish legitimacy and transparency, even when parties are not familiar with one another.
- The value, it turns out, resides in the ecosystem as the blockchain network grows: This should be no surprise to an exec who saw the growth, first of LANs and WANs, and later the Internet and Web. So too, as a business network blockchain can include several different types of participants. Depending on the number of participants in a blockchain network, the value of assets being exchanged, and the need to authorize members with varying credentials adopters should observe the difference between “permissioned” and “permission-less” blockchain networks. The real value for blockchain is achieved when these business networks grow. With a strong ecosystem, blockchain networks can more easily reach critical mass, allowing the users to build new business models and reinvent and automate transaction processes.
- Blockchain can significantly improve visibility and trust across business: Block chains can reduce transaction settlement times from days or weeks to seconds by providing immediate visibility to all participants. The technology can also be used to cut excess costs by removing intermediary third-parties, those typically required to verify transactions. Because blockchain is built on the concept of trust, it can help reduce risks of illicit practices carried out over payment networks, helping to mitigate fraud and cybercrimes. Speed, cost efficiency, and transparency are among blockchain’s most significant benefits in the enterprise and within ecosystems of companies conducting trade. IBM, Walmart and Tsinghua University, for example, are exploring the use of blockchain to help address the challenges surrounding food safety [see graphic above]. By allowing members within the supply chain to see the same records, blockchain helps narrow down the source of a contamination
“Critical success factors in blockchain engagements require top-down executive support for innovative use cases and bringing key network participants into the dialogue from the start,” according to Marie Wieck, general manager, IBM Blockchain.
DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at technologywriter.com and here.