An often discussed but rarely understood topic, Blockchain – the technology made famous by its role in providing the basis for virtual currency Bitcoin – is on the brink of completely redefining the way we structure and share data, but what exactly is it? And how might a DevOps way of working support its adoption?
What Is Blockchain?
“A way of describing Blockchain is to imagine a timeline of trusted data, created by consensus of shared partners, rather than blocks. This is because you can’t re-write or change what’s happened in the past if you make a mistake, you can only adjust to create a better future.” -Daniel Halstead, founder, Blocktribe.com.
For our not-so technically advanced readers, Blockchain is a digital ledger, distributed database or timeline that provides a secure way of making and recording transactions, agreements and contracts – effectively anything that needs to be recorded and verified as having taken place. It does this by creating public lists of data sets or ‘Blocks’ and distributing them in a decentralized manner to a network of computers. Each ‘Block’ has a timestamp and link to the one preceding it, something that ensures everybody’s copy of the distributed Blockchain is kept in sync.
Source: Using Blockchain to Secure IoT.
Despite it being a relatively new topic, Blockchain technology has been around longer than you may think. As we mentioned at the beginning of our article, its’ most well-known use so far is its public Bitcoin or ‘transaction recording’ role. However, the uses of Blockchain are not limited to public financial transactions and the financial services sector, in fact, it has two other key roles - Establishing trust/identity and Establishing contracts or ‘Smart Contracts, - roles that could have a significant impact on both the music and legal industries, especially where intellectual property or ‘rights’ are involved and there is a need for a better sharing economy.
But for now, the sector most invested in the possibilities of Blockchain is financial services, and several initiatives can be found below:
- ABN AMRO is investigating how Blockchain smart contracts can be applied to problems in trade finance and transaction banking e.g. how the technology can facilitate the issuance of letters of credit, in which a bank guarantees that a buyer’s payment will be received according to the agreed terms and conditions.
- US based bank Citigroup has been investigating the possibilities private Blockchains present as well as the introduction of an internal currency focusing on payments and eliminating counterparty risks when dealing with smaller local banks.
- Santander has identified 20-25 possible applications of Blockchain technology in banking, including international remittance, syndicated lending, and collateral management.
Blockchain and DevOps
Financial services companies - the early adopters of Blockchain - are the same organizations that are now wrestling with increasing regulations, cost pressures, legacy IT estates and increasing customer demands. As we have discussed in previous articles, DevOps practices can provide great value to organizations under pressure to become more customer-centric and innovation focused.
The efficiency, quality, and consistency that the adoption of DevOps provides is exactly what is required for traditional organizations looking to embrace leading-edge technology such a Blockchain.