Welcome!

@ThingsExpo Authors: Yeshim Deniz, Elizabeth White, Pat Romanski, Liz McMillan, Zakia Bouachraoui

Related Topics: @ThingsExpo, Agile Computing, @CloudExpo

@ThingsExpo: Blog Post

Blockchain: Why It’s So Much More than Bitcoin By @EFeatherston | @ThingsExpo #IoT

An interesting feature about blockchain technology is that there’s no central authority or single source of the ledger

(Note: This is the first in a series of posts dedicated to the topic of blockchain technology.)

There's a new kid on the block of disruptive technology. Blockchain. A day doesn't go by that you can't find numerous articles about it. Topics range from how JP Morgan is making significant investments in exploring the technology, to the Republican GOP using blockchain to allow online voting in the recent Utah caucus.

It's definitely a hot topic of discussion. At times it sounds like blockchain is replacing cloud in discussions as the technology panacea that will solve all problems. On the flip side, one of the first statements I invariably hear when blockchain enters the conversation with clients is, "We're not interested in Bitcoin." For many, the terms blockchain and Bitcoin are synonymous.

Blockchain ≠ Bitcoin!

In a recent weekend tweetchat (#CIOChat hosted by Myles Suer, a business strategist at Informatica), blockchain was the topic of discussion. One of the threads in the chat centered on the challenge caused by the blockchain / Bitcoin association. Ryan Fay, CIO at ACI Specialty Benefits, said it best, "I can't wait to start a conversation about blockchain and not spend an hour talking about Bitcoin." This reflected the viewpoint of many in the chat.

The connection is understandable. If you do a Google search on blockchain, the top results inevitably pair the terms "blockchain" and "Bitcoin." Blockchain technology originated in the establishment of Bitcoin. It enables digital currencies like Bitcoin to work.

A colleague of mine, Zach Slayton, VP of Digital Solutions at Collaborative Consulting, gave the analogy of fish and water. A fish (Bitcoin) needs water (blockchain) to survive. But water (blockchain) does not need the fish (Bitcoin). So while Bitcoin needs blockchain to work, blockchain doesn't need Bitcoin to provide value.

(I'm not going to attempt to discuss the pros and cons of Bitcoin here. Those conversations can be almost as emotional as political discussions - and voluminous enough to fill books.)

What exactly is blockchain?
In simple terms, blockchain is a digital ledger. You can think of it as a spreadsheet. The blockchain ledger comprises a constantly growing list of transactions called "blocks" - all of which are sequentially connected. Each block has a link to the previous one in the list.

Once a block is in the chain it can't be removed, so it becomes part of a permanent database containing all the transactions that have occurred since its inception.

One of the more interesting features about blockchain technology is that there's no central authority or single source of the ledger, which means it exists on every node that's associated with it. Yes, every node has its own complete copy of the blockchain. As new blocks are added, they're also received by every node that participates. Distributed consensus and trust ensures the integrity of the system.

Instead of Bitcoin, think in terms of assets
If you look at blockchain through the lens of Bitcoin (or for that matter, cryptocurrency in general), it can provide a very limited view of blockchain's business value and usefulness. If instead, we think of it in relation to assets of all kinds, we see a landscape of nearly boundless potential.

In her book, "Blockchain: Blueprint for a New Economy," author Melanie Swan describes three categories of blockchain:

  • Blockchain 1.0 - Currencies. This includes currency transfers, remittances, and digital payment systems. This is the area most of us are familiar with as it is the territory of Bitcoin and other cryptocurrencies.
  • Blockchain 2.0 - Contracts. This extends blockchain into financial and marketplace applications. Assets include items such as bonds, stocks, loans, titles, and anything that has an implied agreement or contract.
  • Blockchain 3.0 - Organizing Activity. This takes blockchain out of the financial space and into areas such as education, government, health, and art. In these areas, asset types may be physical, digital, or human in nature.

In the second two categories, blockchain has far more potential than Bitcoin. And these applications are starting to garner significant interest throughout various industries.

Blockchain 2.0: Contracts
The potential benefits (and disruption) presented by blockchain in the financial services industry has not gone unnoticed. As I mentioned at the beginning, JP Morgan is making significant investments in exploring blockchain. Many in the financial services industry are starting to take a serious look at blockchain technology and its potential impact.

  • Oliver Bussmann, CIO of UBS says that blockchain technology could "pare transaction processing time from days to minutes."
  • Visa, Citi, and Nasdaq have invested $30M in the blockchain startup Chain.com.
  • DTCC (Depository Trust & Clearhouse Corp.) recently held a symposium on blockchain titled, "Embracing the Disruption." (DTCC acts as the trusted third-party clearing house for settling a majority of the securities transactions in the United States. Adoption of blockchain in the securities arena could cause a huge disruptive impact to their business model.)
  • In a recent article in Fortune Magazine, Christopher Giancarlo, a commissioner of the Commodity Futures Trading Commission, expressed the view that blockchain could have helped save Lehman Bros. He said, "If an accurate [blockchain] record of all of Lehman's transactions had been available in 2008, then Lehman's prudential regulators could have used data-mining tools, smart contracts, and other analytical applications to recognize anomalies. Regulators could have reacted sooner to Lehman's deteriorating credit-worthiness."

It is worth noting that Bitcoin has no place in any of those discussions. This is purely about leveraging the technological benefits blockchain may provide to solve real-world business issues in the financial services sector.

Blockchain 3.0: Organized activity
Outside of the financial arena, blockchain could be used in some very out-of-the-box scenarios that one might not consider at first. As noted earlier, the use of blockchain to enable online voting during Utah's recent GOP primary is just one example.

This application of the technology clearly demonstrates the concept of distributed ownership. When I create my "vote asset" and it's placed on the chain, I don't own the chain but I do own my asset, which is my vote - and also a block in the chain. So every voter owns a block in the chain. These blocks become permanent records of each individual's assets and are immutably validated by consensus on the chain.

With that concept in mind, it's exciting to think about blockchain's potential in sectors and industries like government, education, and healthcare - just to name a few.

  • In Estonia, the government is using blockchain to secure over 1 million electronic health records (EHR). It's important to remember that patients own their individual EHR assets, the security and integrity of which are maintained within the blockchain. Rather than calling and relying on providers for record transferals, patients can transfer records themselves through the blockchain.
  • The United Kingdom's chief scientific advisor recently published a report entitled "Distributed Ledger Technology-Beyond Blockchain." In it, he states that the technology "can revolutionize services, both in government and the private sector."
  • During the weekend #CIOChat tweetchat I mentioned earlier, the topic of blockchain's potentially disruptive impact on education produced a lengthy chat that continued well beyond the weekend. Digital strategy advisor Stephen diFilipo, Digital Strategy Advisor, Peter Salvitti, CTO, Boston College, and Joanna Young, CIO, Michigan State University, all raised points of disruption and impact including:
    • Proof of learning and achievements
      • Credentials validation
      • Transcript verification
    • The concept of micro-learning and micro-credentials
  • In the world of the Internet of Things (IoT), IBM and Samsung jointly developed a proof of concept demonstrating a decentralized IoT telemetry system powered by blockchain technology.

We have miles to go and promises to keep
The great promise of blockchain extends far beyond its role as a platform for the successful operation of Bitcoin and other cryptocurrencies. Yet, for some applications under consideration, technological challenges including performance and scalability will need to be addressed.

As with any technology, blockchain is a tool, not a destination. Ultimately, as technologists, our job is to help the business achieve its goals - and reach its destination - by leveraging tools that provide business value.

I count having blockchain in our toolbox as a net positive, because as I've illustrated above, it's so much more than Bitcoin. I'm confident that as we progress forward, that association will slowly fade away.

More Stories By Ed Featherston

Ed Featherston is VP, Principal Architect at Cloud Technology Partners. He brings 35 years of technology experience in designing, building, and implementing large complex solutions. He has significant expertise in systems integration, Internet/intranet, and cloud technologies. He has delivered projects in various industries, including financial services, pharmacy, government and retail.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to great conferences, helping you discover new conferences and increase your return on investment.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.