When blockchain first garnered mainstream attention it was known as the technology that facilitated the Bitcoin digital currency. But since then, the use cases of blockchain have multiplied, and the technology has been maturing every passing year. As a result, this initial hype has turned into action from CIOs, with investment in the technology on the rise; IDC expects worldwide spending on blockchain solutions to hit £13bn in 2023.
Blockchain will radically shift the day-to-day operations of all types of organisations, enabling an immutable data record of almost anything and a new baseline for collaborating to achieve business goals. Gartner emphasises that despite the technology maturing completely by 2025, organisations can’t afford to ignore the powerful technology now, as it could give competitors who adopt blockchain added impetus, while it may dissuade partners and customers who want to work using a blockchain network from working with an uninterested business.
Blockchain use cases
So how is blockchain currently being used? It’s being used to enable enterprises to generate carbon assets more efficiently; improve efficiency, transparency and operation of supply chain finance in pharmaceutical procurement; digitise the issuance of securities for small and medium enterprises; ensure there’s accountability and transparency when it comes to the data exchange process in healthcare; and further strengthen consumer confidence in the global food system. These are just some examples of the wide variety of use cases for the technology.
But what it enables now is just scratching the surface; Gartner stresses that blockchain provides a spectrum of opportunities that evolve over time, meaning that CIOs should plan for incremental evolution of their own blockchain strategies.
They can do this by first focusing on creating a robust infrastructure, building and maintaining an effective bridge between the underlying technology and their strategic orientation. Initially, CIOs can experiment with blockchain-enabling components, before moving onto blockchain-inspired technologies, and then to blockchain solutions which have all five key ingredients: decentralisation, immutability, encryption, tokenisation and distribution.
Instead of merely looking at existing use cases, organisations should look for opportunities to leverage blockchain technology for deeper business changes that can drive real value. This might mean that blockchain use begins outside of the IT department, and so the CIO has to anticipate what the business needs would be in this scenario. That means gaining an understanding of blockchain standards, tools, and what type of personnel would be required to drive a blockchain initiative, and make it a success.
In addition, they need to incorporate blockchain into their security strategies and vice versa. Blockchain technologies are considered secure because they rely on cryptography to make it difficult for anyone to alter or manipulate data, but they are not all created equal. Public and private blockchains have different security threats attached to them. For instance, vulnerabilities in a company’s infrastructure can be manipulated by those with ill intent. This is why it’s crucial to have a highly secure infrastructure that prevents anyone from accessing sensitive information, denies illicit attempts to change data or applications within the network and guards encryption keys using the highest-grade security standards so that they can’t be misused. Enterprises have to therefore start looking at pervasive encryption over traditional partial encryption methods.
Planning ahead with blockchain
However, how enterprises fare in adopting blockchain depends on the approach they take now. Rather than sitting back and waiting for advanced blockchain solutions to hit the market, CIOs must consider how the technology could be used now, and plan for the next five years.
At the same time, CIOs must come to rely on an agile and robust infrastructure which ensures the technology meets the businesses’ underlying goals, and all whilst keeping security, compliance and governance in check.
By running IBM Blockchain Platform for IBM Cloud Private on IBM Z, businesses can hold data locally to meet regulations and corporate preferences, while achieving the same advanced security, scalability and performance they would get in the leading public clouds, such as IBM Cloud.
With IBM Blockchain Platform, which is now available to deploy on multi-cloud — including on-premise using IBM Cloud Private on Z, organisations can start to unleash the innovation, speed and scale of blockchain technology while ensuring they protect data better than ever before.
It’s worth addressing the misconception that blockchain is just inherently secure and therefore does not require a secure end-to-end computing infrastructure. This is not true; blockchain still relies on many traditional technologies for authentication, data processing and APIs, meaning that if an enterprise uses a server or mainframe for any of these processes that has not taken into account adjustments required for permissioned blockchains, then they’re likely to leave themselves vulnerable to attacks.
IBM’s LinuxOne incorporates the highest commercial security classification and specific features that are required to secure blockchain nodes from all sorts of attacks – whether they are internal, external or even coming at the developer stage. Blockchain on LinuxONE prevents even root users and administrators from taking control of the system, and denies illicit attempts to change data or applications, or insert malware within the network.
Blockchain is not just about security; the whole reason organisations are creating blockchain platforms is because enterprises are seeking easier ways to collaborate, faster processing times and performance at scale; three core components of IBM LinuxOne.
This is why companies like DACS have been able to create first-of-its-kind trusted environments for digital asset transactions. The company uses IBM LinuxONE and IBM cryptocards to differentiate its platform, providing end-to-end security for digital assets. The on-premise pervasive encryption capabilities offered were a key differentiator for DACS. Meanwhile, Phoenix Systems selected IBM LinuxONE for its digital asset platform KORE. Thanks to IBM, Phoenix Systems can encrypt 100 percent of application, cloud service and database data without application changes, delivering unparalleled security and privacy for its clients.
To find out more about the technology, or to talk to an IBM Blockchain representative, please click here.