What is this “Blockchain” thing?
A Blockchain is a type of database that is highly distributed. Blockchain technology has been around for quite some time. It has only recently gained notoriety as Crypto Currencies, which rely on Blockchain databases, have started to gain traction.
Typical databases are run and controlled by a single server, which makes processing transactions very simple. However, as you can imagine, having only one copy of the database can be risky if something were to happen to that server. Blockchain by comparison, requires a multitude of servers to maintain a copy of the database. When a transaction is written to the database all the servers must process the transaction, and agree that the transaction is valid before committing the information to the database. This process can be quite intensive as the amount of transactions and servers grow. The main benefit however, is the technologies resiliency and reliability.
The database itself is unlike the databases that run your company’s applications. The Blockchain is one long ledger of transactions. Blockchains can be built to record various types of information. Crypto Currencies such as Bitcoin record who paid who how much digital currency and when. Ie Joe paid Ann 32 Bitcoin on 12.25.2017. Other blockchains allow for more complicated information to be recorded. An example of a more complicated transaction would be “Company A received 341 units of UPC 3442913232 with the description of purple teletubby plush toy from Company B on 12.25.2017”
Why use Blockchain?
Blockchains have limitations and drawbacks, but there are a number of reasons why they can be transformational.
Blockchains allow “Interested Third Parties” to maintain a shared ledger of information in a secure way that makes it nearly impossible for one party to fool the other parties. The absence of a singular authority guarantees that as long as the parties remain interested in the information being shared, the information will always be available. In IT we call this having no “Single Point of failure.”
As an example, IBM is working on Blockchain technology that can unite a global supply chain. Imagine every company that participates in the automotive industry from the ore mines, to Ford motors making available supply and demand information. You can imagine that supplying markets with goods could be dramatically more efficient. A singular supply chain ledger could communicate very important information to these interested third parties. The Steel Mill could understand current ore supplies, which happens now. But it could also understand future demands for it product based on transactions that are occurring further up the supply chain. This is just one exciting example of what Blockchain technology will have in store for us.
Can Blockchain technology help my company?
We are still in the very beginning when it comes to creating use cases for Blockchains. There is a huge amount of development being done in this area. The short answer to this question is, probably not right now. However, it’s important to keep our eyes and ears open to what is going on in this space. We are keeping a keen eye open to developments in Blockchain. Here at PCG, we see this technology as a possible huge boom for our clients in the future. We will keep you informed as to developments that might affect you and your company.
Here is a list of interesting Blockchain projects: