If you say ``blockchain'' to the average person and ask what immediately comes to mind, you might get references to Bitcoin, the dark web, fortunes won and lost, Facebook's Libra. Or you may have a blank stare. So when you tell them that some of the world's most conservative companies are using it or that the Italian banking system is now dependent on it, it's no wonder their heads are starting to spin. In fact, it is true that many of us in the 'corporate blockchain' world have been working for over five years to apply the techniques developed by Bitcoin to solve today's business problems. I fled. But the technologies we've developed and the applications we're developing couldn't be further from that starting point, and we still haven't done a good job of taking people on the journey that we ourselves are on. . About the Author Richard Brown is CTO at R3 Here I will try to dispel the myths around corporate blockchain that do it a disservice and explain what it really is and how it can bring benefits to the business world.
go back up
When trying to separate blockchain and Bitcoin, it may seem counterintuitive to start by talking about the birth of Bitcoin; but the truth is that the history of blockchain cannot be explained without talking about Bitcoin. When the pseudonymous Satoshi Nakamoto published ``Bitcoin: A Peer-to-Peer Electronic Money System'' in 2009, a manifesto proposing an alternative form of currency that was a "purely peer-to-peer version" was presented to the world. pair of electronic money ”. This particular form of alt currency, pioneered by Nakamoto, is Bitcoin. Above all, Nakamoto did not wake up one day wanting to "build a blockchain." No. Instead, it turned out that the vision of a peer-to-peer electronic payment system required an architecture where there was no single party in overall control, where each participant could verify themselves. even transaction history and where everyone needed a way to make sure their opinion of the ledger was the same as everyone else's. The need for a blockchain architecture arose from the demands of Bitcoin. But once you've got the idea of a shared network where each participant checks for updates themselves, and there's an agreed mechanism in place to make sure people agree, it's natural to start identifying other problems you can solve as well. . Therefore, it is useful to think of Bitcoin as simply one of the many applications of blockchain technology. Basically, a blockchain is an architecture for a distributed network where each participant can verify that their view of all relevant transactions is the same as that of their peers. It allows you to create applications where each participant knows for sure that "what you see is what I see" (WYSIWIS). This is what Nakamoto needed to make Bitcoin work: a way for each participant to verify things for themselves (without trusted third parties), and a way to make sure they all come to the same conclusion as to what actually happened in a case. in which two trained but competing actions occur at approximately the same time (avoid double spending). But what does this really mean, and how does it apply in a business context?
Get the definition of corporate blockchain
The description I have above doesn't sound like much. But when you know you're in sync with your trading partners and have agreed to the rules for updates in advance, it creates some extremely powerful possibilities. Take the example of a borrower negotiating a loan with a complex syndicate of lenders. Lots of moving parts, lots of lawyers, lots of incompatible computer systems, and a set of contracts that could last for the next thirty years. If he could be sure that all the participants ended up having the same view of the transaction and shared the same business rules about how the contract would evolve in the coming years, he could drastically reduce the number of errors, duplications, queries and reconciliations. The "WYSIWIS" idea, when applied to enterprise networks trying to manage a complicated business process, is extremely attractive. And this is the fundamental promise of a blockchain architecture. But there is also a problem. Traditional license-free blockchain architectures, in which all data is shared with all parties, on which Bitcoin was built, do not fit well in a corporate environment. Worse still, permissionless blockchains try to hide the identity of their participants, while companies want to be completely sure who they are signing contracts with. Thus, my company and others found themselves in a curious position at the beginning of our travels five years ago. The fundamental WYSIWIS promise of blockchain has the potential to transform entire industries, but the specific implementations that support public cryptocurrencies have designs that make them useless in a corporate context. This is why the blockchains used today to solve real business problems are almost entirely real developments. Strongly inspired by public platforms, but fundamentally different in architecture.
Email, but for machines?
In essence, the enterprise blockchain creates a way for different systems to communicate with each other in a way that makes sure they are in sync, so that businesses can do what they are already doing, but better. One way to think about blockchain is email for machines. Emails work very well to communicate and share information with people from all the companies we work with. But the blockchain allows us to communicate and share information with the systems of the companies with which we work. It is a common technology that can be used by all industries. With the same attributes as email for business-to-business communication, enterprise blockchain brings together identity management at the institutional level; self-service advertising; asynchronous secure messaging; a shared flow and business logic; and integration capabilities. This is the gist of what you need to link applications across different businesses. Going from a world where everyone builds and runs their own standalone apps, which are infinitely out of sync, to a world where everyone uses a market-wide shared app, dramatically reduces gaps and bugs. And that's what we mean when we talk about "helping companies do better at what they do." This is where the real opportunity of blockchain technology lies: optimizing not just entire companies, but entire markets. Most companies are centralized, but the markets in which most companies operate are decentralized.
Market-level optimization
Enterprise blockchain is the catalyst for this market-wide transformation, and enterprise blockchain platforms are working some of their magic, making seemingly insignificant improvements to B2B business processes. By doing so, they dramatically increase the levels of automation and consensus. The promise of enterprise blockchain has come a long way since it was first made public five years ago. We have seen use cases in almost every industry imaginable and there are few industries that could not benefit from its core features of trust and transparency. As with any disruptive technology, understanding its premise and embracing the idea of deviating from the status quo will perhaps be the biggest challenge in unlocking enterprise blockchain at scale. Blockchain, when applied to solving business, is not about changing legacy systems, but about connecting them and offering new technology that can make them work better together. If the first fifty years of fintech were focused on optimizing the operations of individual companies, the future will surely be optimizing entire markets. It is the ultimate promise of enterprise blockchain technology for financial services and more.