Technological innovation is radically changing the way the world operates, and blockchain, in particular, is set to change the way businesses and individuals navigate the internet — and the digital sphere as a whole.
Blockchain has brought about the Internet of Value (IoV) through the implementation of a registry, globally distributed across millions of computers. Shared and accessible to everyone, this registry allows any asset to be exchanged securely, immutably, and almost immediately, without the need for intermediaries.
The companies seeking to adopt blockchain technologies stand to benefit from a range of opportunities: new business models, increased transparency, reduced possibility of fraud, and lower costs of reconciling transactions.
If the sheer volume of companies launching technology pilots is any indication, 2018 will see a massive blockchain takeoff.
Types of Blockchain Networks
Currently, there are three types of blockchain networks, each based on different participant association modes:
- Public — With this type of network, anyone in the world can validate, register, and consult transactions in the registry book. Bitcoin is the best-known example of a public network.
- Private — With private networks, write permissions are kept centralized in an organization. Read permissions are granted by the owner of the network, and may be public or restricted.
- Consortium — With these networks, the consensus mechanism is controlled by the group of participants — the consortium. As with private networks, blockchain reading permission is restricted to participants, but the consortium can grant reading permissions to external entities. Today there are some 25 consortiums, with 52% of them belonging to the financial sector. (Some examples of consortium networks include R3 in the financial sector and B3i in the insurance sphere.)
How Blockchain Is Used Across Various Industries
Due to its origins, blockchain is still very much associated with the financial sector. However, blockchain’s ability to digitize any asset — allowing users to register ownership and facilitate property change transactions — makes it easy to find applications in all types of industries. For example:
- In public security, blockchain allows users to register the identity of people, objects, and families of objects. This has been used in refugee registration and monitoring scenarios.
- In the public sector, blockchain is used for voting processes, vehicle registration, and copyright registration.
- In the insurance sector, blockchain may be used for process scenarios and claims management or fraud prediction.
- In the media sector, blockchain is employed for managing digital rights, tracking fans, and monetizing games.
- In the medical sector, blockchain is used for records sharing, personalized medicine, and regulatory compliance audits.
- Blockchain is used in applications involving the registration of ownership over assets, such as diamonds or farms and land.
- In the automotive sector, blockchain provides reliable records of critical information on various areas of industry, such as the sensors in a vehicle, unique identities for insurance entities, workshops, potential buyers, and traffic.
- In the real estate sphere, blockchain is used as a repository for the verification and storage of property records.
The Evolution of Blockchain
Since the appearance of Bitcoin, blockchain has evolved and grown, allowing for new capabilities aside from the recording of transactions between individuals.
Allowing for registration of transactions between peers, the first version of blockchain is most often associated with the introduction of bitcoin cryptocurrency. The records store the digital signature of the entities (e.g., individuals, cars, etc.), along with complementary information such as property relations, events, and changes in property relationships.
The second version of blockchain enables smart contracts with Ethereum, which implements existing logic in the terms and conditions of any physical contract so that they last until it expires. The smart contract is self-executing and reacts to specific events and messages. Based on these, it performs actions and transfers assets between the parties, leaving a record of everything — and allowing for complete transparency for audit purposes and regulatory compliance.
The third version of blockchain allows users to satisfy necessary business requirements in the adoption of technology as well as the management of certificates and identities, management of encryption, utilization of data in the blockchain with data services and machine learning, monitoring, management, and operation of the platform.
Microsoft has been betting on blockchain for some time now, and has just launched Blockchain as a Service (BaaS), a complete stack of modular logic for building blockchain-based business consortiums, using Azure as a cloud platform. BaaS offers the following features and benefits:
- Selection of any type of blockchain technology, dependent on the specific business scenario to be solved
- Creation of solutions quickly and cheaply in development/testing/production environments with Azure to innovate private and public scenarios, based on permits and consortiums
- Easy, quick sharing of solutions when leaning on Azure
- Availability of basic services that allow for the simple integration of solutions with traditional systems
- A base platform that allows for almost any kind of blockchain implementation (e.g., Ethereum, Ripple, Openchain), with middleware that provides basic services to build solutions on the platform
The basic services of the middleware consist of:
- Management of identities and certificates for authentication, authorization, generation of keys, certificates, and permits for consortium chains
- Encryption services to allow for data in fields only visible to participants and entities with access (e.g., owners, regulators)
- Cryptlets services, which enable a middleware layer that ensures the architecture supports access to external data from a smart contract without compromising security
- Tools for the deployment, management, and operation of registry books distributed in business consortiums
- Data services, Big Data, machine learning, advanced analytics, and business intelligence for smart contracts, blockchains, consortia, and regulators
- Blockchain gateway services to provide transactional integrity to operations between different registry books (e.g., transfers of financial instruments in a supply chain that transcends blockchain networks of different suppliers)
- Coco Framework, recently announced by Microsoft, allows for the creation of highly scalable and confidential blockchain networks, bringing about the integration of node networks based on different existing market protocols (e.g., Corda and Ethereum)
Blockchain for the Future
As blockchain becomes more and more prevalent in business and industry, companies must take care to stay abreast of new tech trends, advancements, and opportunities. The possibilities afforded by blockchain are vast, and will continue to alter the way we do business.
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