Blockchain applications are being developed in industries from capital markets to supply chains, and the speed at which they are coming to market is increasing.
This is according to Arvind Krishna, senior vice president: hybrid cloud and director at IBM Research, delivering a keynote CoinDesk Consensus.
With respect to capital markets, using blockchain to improve dispute resolution and settlement times can deliver benefits across boundaries.
Krishna notes that an estimated $300-billion in underlying costs of global commerce can be optimised with blockchain, a powerful statement of the technology’s benefit to industries such as shipping, property and capital markets.
Blockchain will do for transactions what the Internet did for information, he believes.
Krishna provides recommendations for organizations ready to adopt the technology.
First, blockchain must be built in the open. Open source methods are aimed at providing the transparency, interoperability and support required to bring emerging technologies into mainstream adoption. He identifies Hyperledger, the open source collaborative effort created to advance cross-industry blockchain technologies hosted by the Linux Foundation, as the best path forward to achieve strength and technical stability.
Hyperledger Fabric, a blockchain framework based on open standards to which IBM is an early contributor, demonstrates powerful properties for cross-industry use. It supports partitioned execution, permissioned membership and channels to enhance confidentiality, as well as transaction history and network tools to strengthen production workloads.
Secondly, it is critical to leverage permissions and identity so there are no anonymous participants in a blockchain network and data is consistent and protected — a critical point for both enterprises and regulators alike.
Finally, blockchains must be built in a robust technology environment that enables organisations to remain competitive in global markets: security, confidentiality, auditability, reliability and scalability.
Krishna identifies blockchain’s ability to reduce “friction in transaction systems” as the technology’s core benefit, by removing factors that slow down or interfere with the efficient transfer of goods and services.
What is really going to drive blockchain’s growth is its ability to go “outside the enterprise” and drive savings across every transaction, Krishna says. “Making it scalable, making it easy, making it possible for a lot more people to adopt the technology is where a lot of technologies and companies flounder.”
He cites three examples of work IBM is doing to advance blockchain in a range of industries: Walmart for a food safety traceability pilot; Maersk’s partnership with IBM to develop a digitised global trade platform; and DTCC’s Trade Information Warehouse service to manage record-keeping and payments in derivatives trading.
The lesson of all of these examples, he adds, is blockchain’s ability to improve the physical world, achieve GDP benefits for countries and profit growth for companies.