Technology Reseller v09

01732 759725 BRIEFING 34 A blockchain for overseeing a shipping operation improves efficiency for all parties involved. Because each party has a copy of the blockchain that they can access locally, no one has to log in to anyone else’s system to enter data. Better yet, no one relies on emails to keep paperwork in order. When an event occurs, all parties are notified automatically. If a problem arises, everyone can review the same history, which helps avoid liability issues. The security of a properly administered blockchain helps prevent entries created by unauthorised users or even authorised users from secretly altering data or repudiating a transaction. Is your business blockchain-ready? Despite being in the news for several years as the technology driving Bitcoin, blockchain for commercial use is very new and much of the commercial uptake is still in the proof of concept (or startup) stage. There are four key areas to consider when deciding if your business is ready for blockchain: 1 Are the standards good enough for your industry? Blockchain works as an application programming interface (API), which means standards need to be developed before there is widespread adoption. There are multiple groups working on these, including Hyperledger and the Etherium Alliance Framework. Gartner expects the industry to stabilise in 2018 with 75 commercial blockchain platforms before consolidating to about five platforms in 2019 (source: The Evolving Landscape of Blockchain Technology Platforms ). 2 Is the technology robust enough? While blockchain is conceptually simple, the underlying technology encompasses some difficult technology challenges. This is especially true for the distributed capabilities of blockchain, which allow each party to have their own writeable copy of the same historical record. An entry written to one replica will eventually arrive at the other replicas, which then have to collaborate and decide if the new entry is valid. This can be harder than it sounds to facilitate. 3 Is blockchain secure enough? Whilst, in general, blockchain is considered a step forward for securing transactions, like most things in computing, security is not inherent. Blockchain uses public key encryption, hashing and digital signatures, and other mechanisms that are well known but not always administered correctly. Missteps in securing a blockchain, or simple bugs in the platforms, can cause serious disruption. For example, on November 6, 2017, $280M in assets were accidentally (and temporarily) frozen in a blockchain managed by Parity Technologies due to a bug in the underlying platform. 4 Will I be compliant? As is often the case with new technologies, there are policy issues to be worked out. For example, if a blockchain is immutable, how can the ‘right to be forgotten’, a mandatory requirement in the EU’s General Data Protection Regulation (GDPR), be applied? There are also concerns that individuals making property transfers or declaring wills on a permissionless blockchain conflicts with how institutions manage public records. These anomalies still need to be ironed out. A maturing platform Ultimately, there is no doubt that blockchain is a disruptive technology that has the potential to transform industries. However, despite recent momentum, it is a technology that isn’t (yet) particularly easy to use for many businesses. The platforms are still maturing and like many other software platforms they are subject to bugs and operational errors. The potential risks of being a blockchain pioneer are higher than other technology adoption waves because blockchains typically apply to monetary transactions as well as transactions carrying fiduciary responsibilities. However, blockchain technology is likely to be intrinsically embedded within business processes in years to come. Those businesses that have technology with flexible deployment options, and those with modern enterprise resource planning (ERP) solutions in place, will be in a better position to take advantage of blockchain technology and adapt faster. So, is blockchain right for your business? Assuming you agree that it is a technology that can improve visibility, productivity and security for businesses, then maybe the answer is yes. Any technology that provides components needed to achieve business growth is worth paying attention to, in my view. Is it right for your business in 2018? I’d have to say probably not. Blockchain, in some form, appears to be in everyone’s future, but for most that time is still some way off. and electronically transmitting these documents is a commonplace practice. Critical shortcomings still remain, mainly stemming from Government demands for transparency and disclosure, along with greater complexity in business itself. Today, each company participating in a global logistics process is likely to keep its own collection of documents and records relating to a given shipment. If any piece of documentation is amended or revoked by another party (or Government), it’s possible some participants won’t be notified and might wind up retaining outdated or even conflicting information. Some companies mitigate this problem by using a collaboration tool like Microsoft SharePoint as a centralised document repository. But access to that repository is often managed by one controlling entity who might not always protect everyone else’s interests. Centralised repositories are also expensive to maintain, subject to outages and cumbersome to audit. Blockchain is a great advancement for an industry like global shipping because a reliable, shared ledger simplifies recordkeeping. For example, a manufacturer can write the bill of lading – a document issued by a carrier detailing a shipment of merchandise and giving title of that shipment to a specified party – and contract terms to their copy of the blockchain. Those entries are automatically replicated to copies of the blockchain held by the freight and insurance carriers. The insurance company will write their certification of coverage back to the blockchain, which triggers the carrier to schedule pickup and delivery. The carrier will copy the proof of delivery to the blockchain, indicating to both the manufacturer and the insurance company that the customer has taken final possession. ...continued Erik Johnsson, chief architect, Epicor Software Despite being in the news for several years as the technology driving Bitcoin, blockchain for commercial use is still very new