Why Blockchain
- The business value-add of Blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030 – Gartner
- Blockchain is the future of Business – IBM
- Next Big Thing After Internet
- Blockchain will revolutionize transactions like Internet did for information
- Dubai Govt plans to go paperless by 2020 by shifting all government services to Blockchain – Dubai Blockchain Strategy
- “Expectations of at least 10% of the global GDP being stored on Blockchain platforms by 2025” – World Economic Forum
The Need for Blockchain
- Events in 2008 exposed flaws of banking system
- Slow settlement time
- Fraud, cyberattacks – compromise of central authority will risk all participants
- Duplication lead to errors
Transactions volume growing exponentially
- E-Commerce Growth
- Online Banking
- In App purchases
- Increased Mobility
About to Explode with IoT
- Smart Objects
- Referigerators that buy groceries
- Autonomous Cars that stop by at fuel station
Magnify inherent issues like complexities, vulnerabilities, inefficiencies and cost.
Fundamentals of Blockchain
- Blockchain is a secure, shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network.
- An asset can be tangible — a house, a car, cash, land — or intangible like intellectual property, such as patents, copyrights, or branding.
- Virtually anything of value can be tracked and traded on a Blockchain network, reducing risk and cutting costs for all involved.
What is Blockchain?
Three Principle Technologies Combine to Create Blockchain
- Not new but their orchestration and application
- Cryptography
- Distributed P2P Network that hosts a shared ledger
- Incentive to service the network’s txns, record keeping and security
Key Characteristics of Blockchain
- Consensus: For a transaction to be valid, all participants must agree on its validity
- Provenance: Participants know where the asset came from and how its ownership has changed over time.
- Immutability: No participant can tamper with a transaction after it’s been recorded to the ledger. If a transaction is in error, a new transaction must be used to reverse the error, and both transactions are then visible.
- Finality: A single, shared ledger provides one place to go to determine the ownership of an asset or the completion of a transaction.
Participants and Roles
Blockchain Network Participants and their Roles
- User
- Regulator
- Developer
- Network Operator
- Traditional processing platforms
- Traditional Data sources
- Certificate Authority
Blockchain Checklist
- Does my business network need to manage contractual relationships?
- Do we need to track transactions that involve more than two parties?
- Is the current system overly complex or costly, possibly due to the need for intermediaries or a central point of control?
- Can the network benefit from increased trust, transparency, and accountability in recordkeeping?
- Is the current system prone to errors due to manual processes or duplication of effort?
- Is the current transaction system vulnerable to fraud, cyber-attack, and human error?
What is Bitcoin?
- Cryptocurrency
- Public Blockchain Network
- Application over Blockchain
- Email over Internet
o – An unregulated shadow-currency
o – The first blockchain application
o – Resource intensive
- Blockchain underpins Bitcoin
o Blockchain for business differs in key areas:
o Identity over anonymity
o Selective endorsement over proof of work
o Assets over cryptocurrency
Challenges & Weaknesses in Blockchain for Businesses
- Double Spend Problem
- 51% Attack
- Democratic Nature – The majority of a crowd is always right
- Code is Law
- All executions are final, all transactions are immutable.
- Lack of consumer protection
- OpenBazaar P2P uses partial moderator
- Scaling
- Bitcoin split
- Network size, speed, cost
- New Technology
Blockchain as a Service (BAAS)
- IBM Blockchain
- Premier Member behind Hyperledger Project
- IBM Bluemix container hosting
- IBM Blockchain platform
- Microsoft Azure Blockchain
- Founding member of Enterprise Ethereum Alliance
- Offers both Hyperledger and Ethereum cloud hosting available
- Vision is to become chain agnostic middleware
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