Analysis: IT Heavyweights Are Waking Up to Blockchain

Since launching the Hyperledger Project, IBM has elevated its blockchain focus to align it with its cloud business and its activities in artificial intelligence and IoT architectures.

IBM’s blockchain business is still in its early days. Numbers have not been published but its investment has been huge and now some revenue is trickling in. According to a report published in April by International Data Corp, blockchain has the “potential to become one of [IBM’s] fastest-growing sources of revenue starting in 2017.”

Indeed, the company has initiated more than 400 customer projects involving blockchain technology and it’s involved in some high profile work in the post-trade derivatives processing space with the Depositary Trust & Clearing Corp., automating trade finance with a consortium of European banks, improving logistics with Maersk and advancing food safety initiatives with a consortium led by Walmart.

Since IBM threw its hat into the blockchain ring, a few similarly-sized global IT vendors have also begun to set out their visions with regards to blockchains and most of that activity has been taking place this year. Among the IT heavyweights, blockchain progress has been slow, but now some tangible momentum is building. Here’s a roundup of activity to date from vendors that IBM might think of as its peers.

Hyperledger’s Fabric 1.0 Is Ready to Change the World

When the Linux Foundation introduced Hyperledger, an open-source blockchain project, it aimed to propel distributed ledger technology across the world.

The project took a major stride in that effort today when it announced the general availability of Fabric 1.0, a production-ready blockchain framework that allows users to develop full-fledged distributed ledger applications to solve whatever problems they identify. It is a culmination of more than a year of public collaboration among over 150 participating developers. Engineering was contributed by the likes of the DTCC, Digital Asset Holdings, SAP, IBM and more.

Byzantine Fault Tolerance: The Key for Blockchains

Blockchain companies have seen billions of dollars in investment and many Fortune 500 companies are now exploring applications with distributed ledgers. By now, it’s clearly on the road to mainstream adoption. But to make the most out of blockchain technology, it helps to have an understanding of the concepts that make it so powerful.

The characteristic known as “Byzantine fault tolerance” (BFT) is one of those concepts worth understanding. The ability to tolerate what computer scientists call “byzantine failures” is a crucial part of blockchains’ ability to maintain reliable records of transactions in a transparent, tamper-proof way.

The Byzantine Generals’ Problem

BFT is so-named because it represents a solution to the “Byzantine generals’ problem,” a logical dilemma that researchers Leslie Lamport, Robert Shostak and Marshall Pease described in an academic paper published in 1982. Essentially, it imagines a group of Byzantine generals and their armies surrounding a castle and preparing to attack. To be successful, these armies must all attack at the same time. But they know that there is a traitor in their midst. The problem they face is one of launching a successful attack with one, unknown bad actor in their system.

Coin Center and the Future of Digital Currency

Open, permissionless, distributed blockchain systems such as the digital currency platforms Bitcoin and Ethereum are paradigm-shifting technologies that often raise more questions than they answer. This is especially true in cases where use of the technology intersects with the law, which by its nature has difficulty keeping up with fast-paced innovation. As a result, legal gray areas have emerged that force potential digital currency entrepreneurs to navigate a murky and uncertain regulatory environment—an expensive and time consuming prospect that cools growth in the sector.

Coin Center is a Washington, D.C. based think tank that studies these questions, develops sound policy answers and advocates for solutions. Its goal is to help government foster an inviting environment for open blockchain development. Through this work, we have developed a keen understanding of the key regulatory issues looming over open blockchains. These are the areas on which Coin Center has been focusing.

The Fourth Industrial Revolution: Blockchain Tech and the Integration of Trust

In the very beginning, blockchain technology was thought to be the next generation of fintech infrastructure. The characteristics, including its inherent distributed nature, trustless consensus mechanisms and reliability, as well as the fact that it makes data publicly available, have made banking institutions around the world eager to change their backend systems to use blockchain technology.

Blockchain technology’s high efficiency, low costs and high security have been discussed and explored by various industry experts and intellectuals. This globally recognized disruptive new technology is continuously being examined,researched and applied to create new business models and regulatory services with cooperative thinking. Its globally efficient cooperation method has been bringing the cost of verification and trust down to a minimum.

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