Blockchain is a technology that has made notable inroads in the press during 2015. Bitcoin has been in the press quite a few times during the year, notching up all-time-high valuations, then noting all-time drops in valuation. The technology behind bitcoin is Blockchain – but what is it and how might it be leveraged?
In a nutshell Blockchain is a distributed ledger or distributed database that offers continuous updated view of a set of transactions that has no central point of control or failure. The long list (or chain) of transactions committed to the database are copied automatically across the network. There is no central hub’ there is no authority to edit or change the log. Any inquiry of the network inquiries of all the same data. The cost basis for maintaining this “single view” of transactions is substantially lower than centralized database built systems.
When we think about how firms operate with data, the very idea of a “single view” of anything tends to send shivers down the spine. Firms struggle terribly with “single view” of customer, even when they have total control of all the centralized systems money can buy. If you add big or social data about consumers, then expand the universe of candidate data to the Internet of Things, the scale of complexity becomes maddening. So can Blockchain help?
Firms have been leveraging numerous database systems as the foundation of applications to model single view of transactions, master data, and analytics for years. They tend to struggle to make the systems pay for themselves – not really due to the technology but mostly due to the effort for business people to participate in information governance – the work needed to set and agree policy and enforce policy. Even in-memory and cloud-based offers, still leveraging a centralized database mentality, really won’t make much of a difference to the main barrier firms face in “single view” land.
Blockchain might change all this. The reason I say this is because the economics and effort to share the policy agreement, setting and enforcement might change significantly. In traditional approaches (even though leveraging in-memory and cloud), data (and the policy about it, or metadata if you prefer) has to physically shared and communicated with all interested parties. Linking many hubs together is a complex task. Due to the nature of the world each hub is bound by specific hardware and software and standards, sold by vendors. The semantic data model has little chance of persisting across such a heterogeneous technology landscape. The quality and business relevance of information (the “I” in IT) is held hostage to the complexity of technology (the “T” in IT). Blockchain might change this.
Imagine an industry mesh built on public, shared, synchronized master data that:
- powered the devices that formed Industry 4.0;
- powered the algorithms sitting on the devices comprising the Internet of Things;
- was consumed and formed the basis of all financial and related application transactions for all firms connected to the mesh network
- drove all analytics that triggered all decision-making across those same firms, algorithms, analytics, applications and devices?
Is that so far fetched? I suspect that a Blockchain mesh network is just what the semantic web needs to accommodate the semantic enterprise at an industry level. The next year could be very interesting, and very disrupted.