“ Over the past two decades, the Internet has revolutionized many aspects of business and society–making individuals and organizations more productive. Yet the basic mechanics of how people and organizations execute transactions with one another have not been updated for the 21st century. Blockchain could bring to those processes the openness and efficiency we have come to expect in the Internet Era. ” —Arvind Krishna, Senior VP, IBM Research
If right now you are holding in your hands an Android, BlackBerry, Linux, Windows or an iOS powered device, then at your finger tips is more processing power, than NASA's 1969 mission to the Moon. Processing power and the application of this power is growing exponentially, yet the majority of our business is governed by paper based contracts.
BlockChain provides the building blocks to take the way we do business to the 21st century, let's recap key business terms relating to BlockChain:
Business Network: Businesses don't exist in isolation - they are connected to customers, suppliers & partners and exist across Geographies & regulatory boundaries in a business network. The network is not static over time and will morph on business acquisition & merger.
Wealth: The sum total of flow of goods and services across business network. Growth of wealth is constrained if networks are siloed or inefficient.
Asset: Anything that is capable of being owned or controlled to produce value, and has positive economic value is an asset.
Market: Flow of goods and services across network is a market. A market can be open (fruit market, open outcry commodities market) or closed (business supply chain financing, bond market)
Transaction: A record of an asset transfer between two or more participants.
Contract: Set of conditions under which a transaction occurs.
Ledger: THE system of record for a business, and records asset transfer between participants that affect the business. Ledgers are not new – they have been used for double entry book keeping since the 13th Century. Business will have multiple ledgers for multiple business networks in which they participate.
What is BlockChain ?
BlockChain is a new way to store and record transactions, it has traits of a traditional database. BlockChain uses Smart Contracts (Business terms embedded in transaction database & executed with transactions) to create cryptographically tamper-proof entries to Shared Ledgers. An entry to the Shared Ledger can only be made if all participants of the Business Network agree that the transaction has taken place (Consensus). Transactions are then stored in Blocks. Those Blocks are linked together cryptographically. The Ledger is shared throughout the entire business network, making it virtually impossible to Hack.
BlockChain is still in its infancy. Gartner is expecting this technology to take 5-10 years to be on the Plateau of Productivity.
Industry Leaders are taking note of this technology that is promising to be as much of a game changer as the Internet, are you ?
‘Blockchain technology continues to redefine not only how the exchange sector operates, but the global financial economy as a whole’ – Bob Greifeld, CEO, Nasdaq.
Continue Reading:
http://www.ibm.com/blockchain/
Credit to John Palfreyman
