Over the past decade, blockchain technology has moved from a technological, mathematical and economic curiosity to an emerging, viable tool that can drive industrial growth and financial inclusivity. While the technology has fueled excitement primarily in finance, it has the potential to bring value to a host of other industries.
Key to the value of blockchain is its flexibility; it is not just one technology, rather a collection of tools assembled in a way to provide trust and integrity across an ecosystem. Additionally, this ecosystem can consist of a range of participants—enterprises, individuals, machines or any combination thereof.curiosity to an emerging, viable tool that can drive industrial growth and financial inclusivity. While the technology has fueled excitement primarily in finance, it has the potential to bring value to a host of other industries.
In blockchain networks, trust is decentralized in a model where network participants continually evaluate and compare transaction histories with one another. As transactions between two or more participants on the network are made against digital assets, they are also replicated to all other participants. Then when one participant on the network proposes a list of transactions that s/he believes to be an accurate representation of transaction history, it is compared with the other participant’s local copy of transaction history.
If the comparisons match among the participants in the network, each participant's local copy is committed to permanent storage. Since transaction histories on the network are independently maintained, any transaction that is manipulated on the network is easily discovered and corrected. As a result, it is nearly impossible to rewrite blockchain transactions—and this is what makes it such a valuable technology.
Applying the power of blockchain
While the financial sector has been an early adopter of blockchain technology, segments like oil/gas, automotive, aerospace, energy, agriculture and supply chain are also beginning to realize the opportunities that blockchain can unveil. These industries are evaluating use cases that span everything from replacing decades old business processes to creating new assets for monetization and entirely net new economies.
For example, in the manufacturing space, we are seeing several supply chain and supply-chain risk-management use cases emerge. Having increased visibility into an ecosystem’s efficiency and removing doubts on the quality of that data enables manufacturers to not only drive risk out of their business, but also expand their network of partners.
As more data, assets, transactions and interactions are executed within the network, blockchain can create an unalterable history of past business behaviors. For companies with large transaction histories, this data can be leveraged in other industries, spark new businesses, and (over time) drive higher-quality manufacturing improvements. Much of the same could be said for other industries that consume and transform raw materials into finished products.
Developing the power of blockchain
2018 will be the year when viable blockchain business opportunities will emerge, driven by real needs or gaps in existing workflows. As these are opportunities are explored, interoperability will become top-of-mind and interesting interoperability projects will emerge (see the Cosmos project) that look very promising in their ability to securely and reliably connect multiple blockchain networks.
As interoperability challenges are addressed, confidentiality will become the next area for significant advances. For example, zero-knowledge proofs, a method where one party can prove to another party that a given statement is true without conveying any information apart from the fact that the statement is true, will likely improve in terms of both performance and scalability.
Additionally, expect to see concepts emerge that could be coined “Software Defined Trust” this year—the convergence of “software defined network” with “systems of trust” that will eventually be as easy to deploy as a virtual firewall or some other virtual network appliance.
Blockchain is very much a network technology and will evolve similarly to the way that the internet evolved—although at a much faster pace. As a result, technological advancements will unfold and we’ll see the simplification of discovery, deployment and utility-of-trust systems that employ blockchain, which will lead to a new era of the internet—an internet of value that provides secure value flow across a whole range of industry segments.
Anoop Nannra is Cisco’s head of blockchain initiatives.