Blockchain’s Potential Extends Beyond the Financial Industry
Many have heard about the cryptocurrency bitcoin, but few are familiar with its underlying technology, blockchain. Thanks to IBM and other companies, that’s about to change.
As Gennaro Cuomo, IBM Fellow and vice president of blockchain technology, explains, blockchain has the potential to dramatically change how organizations of all sorts conduct interactions with one another, easing the pain of more traditional company-to-company communications, such as EDI.
IBM Systems Magazine (ISM): Can you give us a little background on bitcoin and blockchain?
Gennaro Cuomo (GC): A real need to communicate about blockchain exists because we have misinformation out there where people are focused on only the cryptocurrency. However, blockchain has potential in more industries than just finance.
Bitcoin is an interesting phenomenon; it’s a global network for cryptocurrency that uses blockchain. This made the blockchain design pattern popular, and we believe other uses of that design pattern exist for a range of business applications. It takes many of the ideas of bitcoin, specifically the notion of a distributed ledger and a system where transactions are validated by a community of users as a way to provide checks and balances. Of course, the community of users is an important aspect of blockchain, with everyone in the network having an exact replica of the ledger at any time and participating to ensure the transactions are properly recorded on the ledger. The visibility of the transactions will vary based on the implementation of blockchain.
This is an interesting design pattern. It’s made popular by its use in bitcoins, but we’d like to make it popular for business applications, such as supply chain and post-trade settlement—the things that run our economy but also things we haven’t even imagined yet. Blockchain could help provide a unique view on business processes between multiple participants that hasn’t been attempted before.
We appreciate the folks who imagined blockchain and its use in bitcoins. Those folks sit on the shoulders of giants. In computer sciences over the past 20 years, pivotal changes have occurred around distributed computing and topography. That was leveraged to create blockchain under bitcoin, and we too are standing on their shoulders but also drawing upon new insight.