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Blockchain Is Set to Streamline Markets and Transform Industries

business of blockchain
Illustration by Greg Mably

Energy, Transformed

Blockchain technology presents a number of future possibilities for revamping the energy industry, as outlined by Frost & Sullivan (bit.ly/2nhxSfi). The capability to establish trust and facilitate transactions among members of a distributed ledger opens the way to decentralized energy generation. Individual homeowners with solar arrays could sell power back to the grid or to other users in a trustworthy way. The transparency of blockchain simplifies the award and distribution of renewable-energy credits. The technology even streamlines collecting and managing data from industrial Internet of Things nodes. All three of these approaches have the potential to increase the efficiency of energy operations and reduce costs, while introducing new business models.

Platform Matters

In order for blockchain to deliver on its promise, it must be available in enterprise-grade form. According to IBM, that means starting with a highly secure implementation allowing levels of permissioning. (Read about how IBM is creating extra layers of security for blockchain ledger technology on the z Systems* platform in “Added Security,”.) It should be based on an open standard so that individual blockchains are interoperable. But it should also be open source because the scale of the problem is too large for any one company to address effectively. Lastly, an enterprise-grade version needs open governance, so that the rules guiding the development and maintenance of the code are consensus-driven and not established by a single individual or entity.

In support of this goal, IBM is making a significant commitment to the development of an enterprise-grade blockchain platform, as well as industry-specific applications (see “The Hyperledger Project,”). These are important initiatives, Tapscott says. “Seeing companies like IBM step up and move into the space is incredibly exciting because they know a lot about what it takes to run massively complicated systems for big mission-critical industries and infrastructure.”

An enterprise-ready platform is the final element of an enterprise-grade blockchain. That means it must be resilient, secure, and scalable, the key characteristics of z Systems. “Fundamentally, blockchain is about transactions,” McDermott says. “You want to use the transaction expertise that IBM has developed over decades, and the reason you want to use it is because of scalability, security, reliability. All of these things are really important to running a business in a responsible way.”

Start Now

Blockchain has been hailed as the second generation of the internet. As with the first generation, benefiting from the disruptive technology requires recognizing the opportunity and acting on it early. Organizations need to consider how blockchain can change their mission and how they execute it. “How does it change the world of supply chain? How does it change the world of finance? How does it change the inside of each company?” Tapscott inquires. “Those are issues that CxOs, especially in IT, need to really think about.”

As to how to get started, the first steps are straightforward, he says. Get educated on the technology. Next, launch an internal pilot project to explore it further. After that, hire a transition team of IT talent inside the enterprise and focus on developing blockchain strategies.

The key takeaway is to avoid delay, Tapscott says. “The most important piece is to start now rather than to wait. The preconditions for this to happen are there, so it’s likely it will happen faster than previous transformations. What’s really important is that you have a technology strategy in the enterprise that allows you to harness this new disruptive trend.”

Kristin Lewotsky is a freelance technology writer based in Amherst, N.H.


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