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Beyond Bitcoin: Blockchain’s Enterprise Explosion Is Nearer Than We Think

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Beyond Bitcoin: Blockchain’s Enterprise Explosion Is Nearer Than We Think

While blockchain isn't ready for enterprise-level development projects yet, it's a lot closer than you might think. Read on to see who's making a splash in the space.

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As blockchain’s acclaim builds, some still dismiss the disruptive inevitability of the technology.

While I believe this ignores what history has proven as the maturity timeline for enterprise tech, the naysayers persist. They point to limited examples of scaled use as evidence that blockchain will remain a cryptocurrency-centric phenomenon, or, at best, in the enterprise periphery.

In one sense, I agree: the full future of efficient, inexpensive, transparent, and secure transacting may rest in future blockchain versions. The solution revolution is not quite yet at hand. Basic transacting needs for some sizeable companies means the latency, cost, and block size limitations affecting public chains are non-starters. They are understandably ill-equipped right now for heavy enterprise use.

But the groundwork is being laid. The iterative cycle of blockchain development means smarter innovators and innovations. Forthcoming platforms, protocols, side-chains, and other infrastructure hold the key to transformation via the blockchain.

Now, this isn’t to say that enterprise use cases don’t exist.

Even in blockchain’s infancy, signs of notable applications are surfacing.

Remarkably, the industry most impacted by impending blockchain application is financial services. For decades, the mess of regulatory intervention, legacy processes, archaic systems, and misaligned incentives in this space have seemed ripe for overturning. Yet time and again innovation was snuffed out.

That big banks, insurers, and credit providers are at the forefront, and nearest to production-ready implementation is the biggest story about which no one is talking.

  • JPMorgan has its own internal blockchain infrastructure called Quorum and partnerships with Zcash. This week, the U.S. Patent and Trademark Office released the company’s patent application for an interbank payments system.
  • American Express is using Ripple to help corporate clients send funds from U.S. to U.K. banks and has filed a patent for using blockchain and cryptocurrencies for customer reward points record-keeping.
  • RBC is experimenting with blockchain for international fund transfers, building a direct alternative to Swift transactions.
  • Bank of America is in process on a patent for a Blockchain-based storage system with automated data authentication.

These are the dominant incumbents that innovate at a glacial pace and are quick to crush upstart tech. These are the companies that institutionalize convoluted processes as a competitive advantage.

And it’s these companies leading the blockchain revolution at enterprise scale. Even they sense what’s to come.

Beyond financial services, blockchain’s significance is growing everywhere from the public sector to manufacturing, media, supply chain, and healthcare. Microsoft reports that while 80% of customers using blockchain in Azure are financial service institutions when considering pipeline engagements, that numbers drops to just over 50%. Blockchain is building its non-financial use footing.

Democratizing the technology and simplifying development is the next step to unleashing blockchain at scale; this is underway today as cloud service providers AWS, Baidu, and Google have all entered the BaaS (Blockchain-as-a-Service) space. Azure’s enterprise-grade development and implementation platform supports a number of ledger solutions and is already at work with Webject and The Monetary Authority of Singapore.

Rigorous architectural principles and onboarding processes must follow. IBM is addressing these issues in its recently announced, enterprise-ready blockchain service based on Linux’s Hyperledger Fabric. This open source project is being developed by about 120 current members of the Hyperledger consortium, including IBM, SAP, Fujitsu, and Accenture. The company is also rapidly launching consulting services and has undertaken more than 400 blockchain projects on behalf of the world’s most mature companies.

Juniper Research believes that more than half of the world’s big corporations are actively considering, or are in the process of deploying blockchain projects. Two-thirds expect the technology to be integrated into existing operations by the end of 2018. So, while the large-scale enterprise applications may not be entirely in place today, they are underway.

Ultimately, doubters need to look no further than where VCs and corporate venture dealmakers are feasting. To date, over $1.8 billion has been invested into blockchain ecosystem companies by major enterprise corporate venture arms. In an article published through Haas Fintech at U.C. Berkley, the author highlights research from Outlier Ventures. An excerpt from the company’s industry tracker states:

“ [...] 140 companies [are conducting] PoCs, from ABN Amro to Wells Fargo. It also lists about 15 companies that have applied for patents related to blockchain technology, including Amazon, Boeing, IBM, and Western Union.

"Companies have also been signaling interest in blockchain technology through strategic investments and acquisitions. In 2016 and 2017, Airbnb, Daimler, Rakuten, and several others acquired blockchain-related startups, while the investment arms of Jaguar, Land Rover, JetBlue, Verizon, and others made blockchain-related strategic investments [...] ”

There is no damning deficiency keeping blockchain from exploding in the enterprise. Every advancing technology has limitations that require it to ‘catch up’ for hardened enterprise use. Improvements in stability, interoperability, and modularity take time.

And hiccups are inevitable. There is a shortage of capable developers and trillions of dollars of sunk architecture costs with which to contend. Orchestrating the movement of stakeholders, systems, and organizations to accommodate the distributed nature of blockchain is challenging. Finance and IT leaders are naturally averse to disrupting legacy business.

But these issues are temporary and, as history has proven, navigable.

Blockchain offers an endless range of use possibilities. Eliminating intermediaries to increase efficiencies and speed. Reducing costs and time related to transaction reconciliations. And eliminating fraud and establishing shared records of truth.

These simple ideas mean unimaginable economic benefit and improvement. It is simply a matter of time.

Find out how Waratek’s award-winning application security platform can improve the security of your new and legacy applications and platforms with no false positives, code changes or slowing your application.

Topics:
blockchain technology ,security ,hyperledger fabric

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