Blockchain as a Service (BSaS)
Blockchain? Im not sure what it is but I do know that Bitcoin used to be worthless and now it is worth a lot… HODL! (hold on for dear life).
‘Bitcoin can be forked so Blockchain is a scam.’
‘Bitcoin uses Blockchain technology, that means it is backed by math and code!’
And these are just some of the things you can expect to hear if you go down the rabbit hole of Blockchain. But what is it really?
What is Blockchain?
The textbook answer is that Blockchain is a growing list of blocks that are linked using cryptography. The first official conceptual use of Blockchain technology was used in the 1990’s when a cryptographer launched Timsec. A ledger system was created and it provided a cryptographic hash that acted as both a digital receipt, whilst also providing authentication. Nonrepudiation is what lead to this type of technology being used as the first crypto currency, which is when ‘Bitcoin’ was born.
While it is true that cryptocurrency is one of the uses of Blockchain, there are also many others uses for this technology. Because of the large scale implementation of cryptocurrencies, the transactions that occur and the processing by miners, it has led to an interesting economy of blockchains that can be provided as a service.
Combining Blockchain with AI
One of the most interesting and prevalent ways to use Blockchain is to combine it with AI:
“Due to the coronavirus outbreak, global supply chains are somewhat stagnant in many sectors. In response to this, IBM has assembled the advances and their learnings from AI and blockchain to develop “more responsive, adaptive, resilient” supply chain management.”
T_HQ, 2020
According to T_HQ, IBM reporting, when the Pandemic clears, we will be entering a new age of business as the combination of Blockchain and other automated business technologies have paved the way for a new era of global trade with;
- Cognitive automated supply chains
- Artificial Intelligence enhancing supply chain management using Blockchain software.
- Predictive models of disruption levels in supply chains
The Future of Blockchain
Because of the above, Gartner has predicted that by 2023 Blockchain will be used to support global movement and tracking of goods and services averaging $2 trillion annually. Additional analysis from Gartner shows that so far through 2020 80% of enterprise Blockchain based applications will fail to save money. By 2022 more than a billion people will have personal data stored on a Blockchain whether they are aware of it or not, and that by 2022 Blockchain based businesses that are able to adapt will be worth an estimated $10 billion.
Four Blockchain Initiatives
As Businesses struggle to adapt to the new uses of technology Gartner has identified four Blockchain initiatives that are projected to generate $176 billion by 2025 and more than $3.1 trillion by 2030.
- Blockchain Disruptor. This initiative is primarily used for decentralized critical business functions such as smart contracts that are used in ICO’s. examples are Synereo a decentralized social platform, OpenBazzar a decentralized B2C marketplace, and Gnosis a decentralized prediction platform.
- Digital Asset Markets. These initiatives are new markets that facilitate the creation and trading of new digital assets. Examples are: NYIAX, an exchange for advertising contracts, RMG a market to trade and hold gold, and Energy Blockchain Labs a platform to trade and manage carbon assets.
- Efficiency play. These initiatives are attempts to improve efficiencies that exist as part of the business process. Examples are DTCC a derivative processing system, B3i a reinsurance process system, and Maersk a global trade and supply chain.
- Record keeping. These initiatives primary purpose is to ensure records cannot be corrupted and can be audited on demand. Examples are Dun & Bradstreet a Business Identification (D-U-N-S Number), Government of the Republic of Georgia for use of Registration of land titles and The Government of Estonia for the Health records of its residents.
The first two are meant to be drivers of innovation for new companies to create new wealth for the economy while the last two are meant to improve existing business models and provide saving with efficiency.
Gartner, 2018
To assist with the challenge of discovering new viable and secure ways to implement Blockchain, CompTIA has organised the Blockchain Advisory Council with the intent of bringing together thought leaders and innovators to identify new ways to leverage blockchain technology in business cases.
Blockchain Scalability Issues
Based on studies by the BCAC aside from the broad adoption of involved parties in a set of transaction, one of the largest challenges faced by large scale enterprise Blockchain adoption is the lack of scalability. While it is nice to pay for a product in crypto, the speed of individual and mining pools cannot compare to the infrastructure of other payment systems. As today it stands bitcoin averages 7 transaction a second while Visa averages 2000. As transaction speed is related to block size in the chain this implies that scalability issues would translate into transaction issues with the potential to negate the possibility of savings as speed of transaction is a top driver for Blockchain adoption.
Blockchain Advantages/Benefits
- Improved security
- Better data integration
- Simplification of workflow
- Lower cost
- Elimination of third parties
- Transparency of transactions
- Alternative to traditional finance
Conclusion
It must be understood that successful adaption of these technologies implies that the businesses must understand the current metrics for these areas and in some cases may require full knowledge of existing systems of Blockchain. Additionally it must be cautioned that while it is possible to use Blockchain and AI to simplify workflows across supply chains; the simplification is dependent on companies implementation of the required technologies correctly and seamlessly in order to ensure a high level of consumer confidence in the economic activity produced by Blockchain. (CompTIA, 2017).
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