Blockchain Technology Lead to New Business Models Creation - René Bostic, IBM
Blockchain is important for businesses because of three factors: adherence to government regulations, need to trace assets and automation of shared business process, believes René Bostic, an IBM Cloud representative.
René Bostic is the Technical Vice President of Innovation and New Technologies at IBM Cloud. René is the expert in cloud computing, DevOps and emerging cloud technologies. She will be a speaker at the Blockchain Conference in Moscow on April 17-18, talking about the lessons learned from the implementation of blockchain. In the interview to the press service of Blockchain Conference Moscow, René Bostic explained why blockchain is important for businesses and which solutions it provides.
Interviewer: Blockchain Conference Moscow (BCM)
Speaker: René Bostic, Technical Vice President of Innovation and New Technologies, IBM Cloud
BCM: Hello, René! IBM website states that blockchain can transform business and disrupt industry. Why is blockchain so important for business?
R.B.: IBM is really excited about blockchain technology because it opens up new ways of sharing data and transactions between companies—this can then lead to new business models and potentially re-invent whole industries. There are three requirements for a distributed ledger technology across business entities. The first requirement is centered on the need to adhere to government or industry regulations across the business network. Secondly, businesses may have the need to trace an asset through the supply chain in minutes versus days. The third requirement is to automate a shared business process using smart contracts across a multi-institution consortium. These are all top factors that make blockchain important for business.
BCM: Which blockchain solutions can IBM offer to businesses? How exactly can they help?
R.B.: After evaluating various blockchain technologies, IBM determined that Hyperledger Fabric was the optimal choice for enterprise grade blockchain. Thus, IBM became a founding member of the Hyperledger Project, a global open source blockchain community that is hosted by The Linux Foundation. Teaming with members of the Hyperledger Project, IBM likewise donated code for both Hyperledger Fabric and an application development framework called Hyperledger Composer which companies can download from GitHub.
One of the learnings from the Hyperledger Project is that many companies did not want the responsibility of wiring together their blockchain business network. Therefore, IBM now offers a solution called the IBM Blockchain Platform, a Cloud hosted enterprise-ready blockchain solution designed to accelerate the development, governance and operation of a multi-institution business network. Companies can easily create the model of the blockchain business network, quickly onboard participants as well as efficiently manage their blockchain business network. In addition, IBM has several services offerings, such as a Blockchain Garage, to assist customers from design to implementation of a blockchain business network for optimal performance and scalability.
BCM: Will you, please, provide an example showing that a blockchain solution from IBM has brought real results for a business?
R.B.: One of the most popular blockchain use cases is the provenance of diamonds across the supply chain. Miners, wholesalers, jewelry designers, manufacturers and retailers can all see the attributes of each diamond on the blockchain to validate authenticity. Retailers can be confident that they are not selling “blood diamonds” or counterfeit diamonds to consumers.
Without blockchain, one USA wholesaler is required by law to pay a USA jewelry retailer $19 million (USD) for falsely using the retailer’s name on engagement rings. With an IBM provenance of diamonds blockchain solution, wholesalers, retailers and consumers will have access to the data that authenticates the diamond on the shared distributed ledger. The potential savings in litigation costs alone demonstrate a benefit of blockchain for business.
BCM: What is the IBM’s attitude to the problem of blockchain hacked by a quantum computer? Is there any solution?
R.B.: You pose a very interesting question because IBM offers both The IBM Blockchain Platform and the IBM Q Network, an emerging quantum computing platform. These are separate technologies and platforms. In the future a quantum computer may be able to crack today's cryptographic algorithms, but they will also be able to define new, stronger cryptographic algorithms.
With the IBM Blockchain Platform, security is implemented in three layers: Hyperledger Fabric, Secure Services Containers and Secure Hardware. When it comes to quantum computing, certain calculations are vastly faster than with traditional computers. If you think of the art of the possible, I can foresee that quantum computing will accelerate computations required as part of secure blockchain applications, thereby, positioning companies to be on the offensive versus the defensive for security threats.
BCM: Why is blockchain use occasional rather than widely adopted?
R.B.: Over the last few years, companies were learning about blockchain and testing its application to their respective industry. They concluded that blockchain is as much a cultural shift than a technology shift. Companies have to agree upon not only the asset, participants and transactions but also intellectual property rights and cost sharing of the blockchain business network. Within the last few months, we are starting to see active blockchain business networks shifting from testing and moving into production. As with any early adopter technology, over time blockchain will become more widely adopted.
BCM: What is it important to consider before integrating blockchain in your business?
R.B.: Start with the problem, not the technology. Can this problem under consideration be solved with traditional technology solutions or are there significant benefits to use blockchain instead? Do not use a blockchain when a database is perfectly adequate. Next, determine the participants and gain their agreement to join your blockchain business network. Co-create the blockchain solution together; do not try to impose blockchain upon your ecosystem partners. Understand who is going to fund the cost. Will the founder fund the cost of the blockchain business network or will the peers jointly share in the costs? I ask your readers to come to the Blockchain Conference Moscow to hear more.
BCM: What will you speak about in your presentation at Blockchain Conference Moscow?
R.B.: Companies tell me that they don’t want to hear the Blockchain overview presentation anymore. They want to learn about real case studies. Therefore, my presentation will cover a real case study and key considerations for a successful blockchain implementation. Thank you for this opportunity; and I look forward to seeing everyone at the conference.