IBM’s Blockchain Leader, Rupert Colchester sat down with the OnTheBlock team to discuss the state of blockchain and how businesses can navigate the hype, side-step the technical jargon and fast-track application. We learnt that the tech giant’s first foray into blockchain frameworks, as Rupert referred to them, culminated in their work on the Open Ledger Project in collaboration with the Linux Foundation, which latterly became known as Hyperledger, the acclaimed open source effort with the goal of “advancing cross-industry blockchain technologies”.
For Rupert, open source as well as open standards and also open governance were key to IBM’s blockchain activities. A commitment to openness gives transparency as to the evolution of the technology and as such gives businesses clarity during application. With an almost inevitable initial focus on cashless systems, banks and financial services, IBM have been exploring the potential of blockchain since the early days and its rise to fame through Bitcoin. They began working with global names such as CLS, the DTCC and Northern Trust, exploring how their clients businesses and indeed industries could be transformed. Today IBM have pushed the boundaries of blockchain, from enabling innovation in food provenance for retailers and suppliers to building more trusted solutions for assuring identity online.
Asked why blockchain was important, Rupert stated that ‘blockchain represents an interesting and fundamental paradigm shift around the sharing of data between businesses – and what the art of the possible is if this data was both ‘trusted’ and ‘decentralised’ – and that paradigm shift naturally generates major hype amongst industry leaders that want to move their businesses forward’. Digesting and translating this hype into useful information for his clients, Rupert’s focus is on the now, on the demonstrable changes which businesses can realise today. And it’s true to say that these transformations can be undertaken by every industry; since shared data between two or more organisations that haven’t historically trusted each other holds value and potential across the globe and almost every business ecosystem. In fact, ignoring the trend was not something Rupert believed any organisation could afford. This goes a long way to explain the rise of consortia around blockchain. As well as a symptom of blockchain’s success, consortia also represent essential drivers for the technology’s continued growth rate.
Blockchain is often referred to as a young technology and there are certainly those who believe that its technical adolescence hold it back, but Rupert believed rather than scaling being purely a technical issue, it was in fact the time spent wrestling with the issue of governance which caused delay. We learnt from Rupert that distributed ledgers are incredibly powerful tools for business networks – and known to be so – but establishing who governs what and what happens from an operational standpoint in these networks however, was a complex and often unfamiliar problem. The evolution of some best practices in DLT adoption will help businesses overcome these challenges, and for Rupert this was valuable information which he and his team were gathering in order to better inform their clients of the right approach. The lesson to learn, is information sharing. Understanding the whole ecosystem of projects can only help organisations to avoid pitfalls and overcome disagreements within the network.
Distributed Ledgers were not the only technology Rupert was helping his clients exploit. Smart Contracts represent a huge area of interest for IBM, and he expects much progress in this area in the near term. In Hyperledger, smart contracts are implemented as ‘Chaincode’, and describe the business rules and logic that should govern each transaction. According to Rupert, the business possibilities for smart contracts that are ’embedded in the blockchain and also shared between participants’ are endless, and certainly in some industries such as Insurance, smart contracts alone represent a transformative technology when considering business processes that are not unique to your organisation. Rupert was excited to see each transformation develop, believing that every industry will use the different components of blockchain from shared ledgers to complex smart contracts, to drive up trust across networks.
See Rupert’s talk ‘The Blockchain Hype: Unplugged‘ on the Center Stage at the Blockchain Live. Also don’t forget to attend IBM’s workshop ‘Build a Blockchain that’s Ready for Business‘ run by Ant Cole in the Blockchain 1.0 Theatre.
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