IBM executive says blockchain becoming a useful ‘real business tool’
It was just a few years ago that enterprises began showing interest in using blockchain as a technology to bring trust, transparency and better collaboration to multiple entities sharing sensitive business data. Yet as the blockchain space has matured, more companies have started to view blockchain less as a technology and more as an important business tool for digitalization.
IBM Blockchain’s general manager, Alistair Rennie, noticed this evolution earlier this year. Cointelegraph had the pleasure of speaking with Rennie to learn more about the evolving enterprise blockchain landscape, how blockchain is playing an important role in IBM’s hybrid cloud strategy, and why “Big Blue” firmly agrees with the principles of private, permissioned networks.
Cointelegraph: What is IBM’s blockchain strategy?
Alistair Rennie: Now that blockchain has been in the marketplace for a reasonable number of years and we’ve worked on hundreds of networks, we are wondering where blockchain fits in within the enterprise digitization journey.
For instance, there is a lot of work being done in financial services and within supply chain networks. We’ve also discovered that many of these networks are not huge in scope and that they have a small number of players getting started with some significant value propositions. Networks can start simple and can grow over time, and we are going to try to address some of this with our solution portfolio.
We’ve also come to understand that blockchain fits into the enterprise architecture in its ability to allow companies to digitize their business processes with other companies. This shows that blockchain is evolving from a technology into a real business tool and that adoption can happen really fast. For example, when COVID-19 began, we saw phenomenal examples of cross-company data-sharing using blockchain as the mechanism. But what was really impressive was the speed.
Blockchain doesn’t have to be a complicated, long-time project. That being said, we are mainly working on blockchain becoming the fundamental component of our hybrid cloud platform for collaboration and trust.
CT: Can you talk more about the role blockchain will play within the IBM hybrid cloud platform?
AR: What blockchain uniquely provides is its ability for people to integrate and manage workflows that go outside of company boundaries. There are ways people can do this today, but it tends to be clunky and involve lots of centralized software and process change.
Blockchain turns out to be a fast way to integrate business data, while using smart contracts for automation of workflows. It creates the capability for collaboration and trust when organizations are dealing with multiple parties.
CT: How can private networks ensure trust with outside entities?
AR: Blockchain technology allows people to share information on a ledger, while smart contracts manage the workflows. For instance, farmers on a blockchain network aren’t sharing all their data with the other farmers, as people can manage who sees what on a private network.
This allows for organizations to enter a blockchain network with a relatively safe mindset that sharing data is okay, and value can be extracted from that. Ultimately, private networks allow people to have visibility for the data they require yet still have a good degree of trust.
Related: From Sea to Table: Norway’s Seafood Industry Hooks Into IBM Blockchain
A good example of this is what Atea ASA, an IT infrastructure provider for the Nordic and Baltic regions, is doing. It is using the IBM Blockchain network to connect seafood farmers with processors and retailers.
CT: How is the IBM hybrid cloud platform different from what IBM Blockchain has already been providing to clients?
AR: The big difference is how we speak to clients. We’ve gone through a phase where blockchain, like any other technology, is viewed purely through a technology lens. But now we are seeing a mainstreaming of that conversation.
We are talking to people from the financial services world and supply chain sector where the word “blockchain” doesn’t even come up. All these organizations care about is provenance, track and trace, and dispute resolution. We want to talk to companies about how to collaborate and create workflows outside of their own environments, using blockchain. The IBM hybrid cloud offering also packages everything an organization needs to easily create a blockchain network. This makes a big difference in terms of driving adoption.
CT: What types of enterprises will want to use the IBM hybrid cloud strategy?
AR: Supply chain management impacts many different companies. These organizations are trying to get visibility through the supply chain, which sounds straightforward, but this is actually very difficult because everything runs on different systems.
In the financial services sector, we are seeing blockchain being used in settlement networks like We.trade. The Blockchain Community Initiative also just announced that its electronic letter-of-guarantee platform has successfully advanced and is now extending the reach of its services and network to businesses of all sizes.
The platform went live in late 2019 and currently handles $300 million in guarantee letters. It has proven to reduce letter-of-guarantee issuance time to less than a day. Basically, any place where there are multibank settlements and connections is where blockchain can be applied. We are also starting to see more experimentation and work with central banks looking to implement a digital currency.
CT: Would IBM ever consider creating a public blockchain for enterprises to leverage?
AR: The principles that we have in place show that IBM cares a lot about blockchain networks that are permissioned and private yet manageable to the people running them. We are focused on making technology more accessible to different organizations and allowing people to start quickly and get value.
In addition, there will be a lot of work needing to be done as these networks go from experimentation to fully functional. Organizations will have to figure out how to govern blockchain networks, how to audit them and how to talk to regulators.
I think the principles of permissioned and private make a lot of sense, and there are many things we can do to make them easily adoptable and accessible.
This post first appeared here: https://cointelegraph.com/news/ibm-executive-says-blockchain-becoming-a-useful-real-business-tool