Blockchain: Game changer or hype?
While most people have heard of blockchain—mainly because it's associated with cryptocurrencies like Bitcoin—chances are the average person isn't quite sure how it works.
But as Dr. Eng Lim Goh, chief technologist for AI at Hewlett Packard Enterprise, explains, blockchain, a distributed digital ledger, is rather simple. He likens it to a ring binder notebook containing many blank pages on which transactions are recorded. These pages, or blocks, are bound by the ring binder, or chain, and are distributed digitally and publicly, with no one custodian, he says.
In the IT world, there's been a lot of noise around blockchain, and out of that has come two schools of thought: "Some people believe in blockchain and really think it will change IT, and other people say it's exactly the opposite. It won't change anything. It doesn't add any real value to it," says Florian Buehr, a solution architect at Hewlett Packard Enterprise.
Why would you want to use blockchain in the first place?
"There are two major reasons," Goh says. "First and foremost is when you want to keep a record of an entire sequence of transactions, especially if you want it to go back all the way to genesis, to the beginning. And secondly, you want that record to be transparent."
Because the record is transparent, meaning everyone has a copy, there needs to be an anti-tampering capability, he says, which is where a cryptographic hash comes in.
But not all blockchains are public, the experts explain. There are also private blockchains, whereby only approved members have access, which is more common in industry, says Goh. The type of blockchain an organization chooses would depend on the type of transparency it needs. And there may be instances where companies don't want even members to see and control access, in which case they would have a central custodian and end up with a centralized ledger like those before blockchain was created, he says.
Three sectors that would be good candidates for blockchain adoption are healthcare, supply chain, and finance, Goh adds.
When blockchain isn't the answer
In cryptocurrency blockchains like Bitcoin, proof of work, or mining, ensures the integrity of the record. But that consumes a ton of energy: "Some estimates suggest that one Bitcoin transaction uses the same amount of energy as 100,000 Visa transactions," notes Michael Bird, host of this episode of Technology Untangled.
Bitcoin aside, skeptics argue that blockchain use cases can be met through easier and cheaper methods.
"Blockchain is not the answer for every use case," Goh says. "You use it where your needs are met by the key features of what a blockchain is."
Tony Costa is senior vice president and CIO at Bumble Bee Foods, the largest shelf-stable seafood company in North America. As he explains, blockchain is helping the company ensure the availability and integration of information across its complex supply chain.
"We deal with some of the most remote locations in the world … and a variety of sophisticated and non-sophisticated suppliers," he says. "So the challenge for us is always how do you build those relationships but also start to integrate your collective businesses."
Costa says Bumble Bee's blockchain started out "as a supply chain optimization project" to improve efficiencies and integration. But it's also about "the business drivers and values that we're trying to accomplish here."
Please read: 4 companies using blockchain for social change
One of its goals is to educate customers on where and how Bumble Bee fish is caught, as well as the company's sustainability programs and its funding of schools and other initiatives in fishing communities—information that can now be delivered to consumers via a QR code that can be scanned with a smartphone.
"So it comes full circle, and this is all supported through a foundation called blockchain," Costa says.
Another emerging use case is automotive manufacturing and the connected car, where blockchain is used to "accelerate autonomous drive and driver assistance, AI development, as well as swarm learning to improve the production quality in manufacturing," as Buehr describes.
The future of blockchain
Goh expects that blockchain will grow "tremendously," but he reiterates that it will be useful in only specific use cases that need the features the technology provides.
The areas he sees the most growth in adoption are edge computing and the Internet of Things. "By the year 2025, there'll be 55 billion connected device out there," Goh says. "When you have so many devices, it becomes more and more insurmountable to have central control of all these all the time." That's where blockchain makes sense, he says: "I believe, in general, the Internet of Things will be the key to the proliferation of blockchain."
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This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.