The adoption of blockchain in telecoms and banking – and addressing interoperability challenges
Last year, Gartner highlighted the top 10 strategic technology trends which would have maximum impact in 2018 over organisations around the world. Blockchain was one of them – with most of us becoming aware of it when it was used for infrastructure in facilitating digital currencies.
Like Gartner, other research firms have also highlighted the fact that blockchain can be utilised as architecture for IT infrastructure, which will reduce operational cost and time consumption for business processes. The core benefit organisations can realise is that of blockchain reducing the risk of managing a central database. Every node or participant will be maintaining records of all transactions placed in the distributed and decentralised network. Based on these benefits, enterprises have started evaluating their applications in business operations.
As per a recent survey by Juniper Research, it has been seen that – the realisation of dramatic diversification of use cases – blockchain has driven 65% of enterprises (having more than 10,000 employees) to initiate its deployment in business operations. Out of that figure, 25% have moved forward from proof of concept stage to trials, or are in a process to launch implementation. The survey involved 200 participant companies who spent more than $100,000 on blockchain projects.
Blockchain use cases for food safety, telecom and banking
Blockchain has been highlighted mainly because of its successful implementation in digital currency use cases. But recently, I came across some other use cases, such as food safety, telecom, and banking.
Walmart leveraged the IBM blockchain platform, based on Hyperledger Fabric, for tracking the food supply chain globally – from supplier to store.
A solution named IBM Food Trust will also be utilised by nine other companies other than Walmart – these are Nestle SA, Dole Food Co., Driscoll’s Inc., Golden State Foods, Kroger Co., McCormick and Co., McLane Co., Tyson Foods Inc., and Unilever NV.
The Telecom Regulatory Authority of India (TRAI) initiated a movement by issuing a regulatory draft to tackle spam or annoying calls despite being opted in to the Do Not Disturb (DND) registry. DND was implemented in 2010 and millions of subscribers opted in. But spammers or third party vendors managed to get consent from subscribers in an unethical way to opt out of the facility. TRAI issued a draft to implement a distributed ledger for subscribers so to emulate the involvement of third-party spammers.
SBI is rolling out a fully-fledged deployment of blockchain in three finance operations: reconciliation, remittances, and trade. Deployment is scheduled for FY2019 as per the information given by the SBI CIO.
Despite having several PoCs and trials done by various enterprises from different industry verticals, blockchain has few implementations, as well as operational challenges which have a significant impact on proposed use cases. In my view, interoperability and transitioning to new blockchain-focused infrastructure is the primary concern for organisations who are evaluating this technology for operations.
Interoperability within two networks means that anyone in two different blockchain networks can transact, read, interact and interpret data which is cross-compatible. This is a crucial factor where all blockchain networks need to work on. Let’s understand two cases of interoperability blockchain may face.
Interoperability between new and legacy infrastructure
Legacy infrastructure was characterised by having a central database which is shared between systems connected in a network. Transitioning from centrally managed to distributed or decentralised is concerning for organisations as there is a major roadblock that is posed to achieve the blockchain promise. Legacy infrastructure needs to go through drastic upgrades or changes before getting compatible and fully functional to operate as a distributed ledger network.
Interoperability between different blockchain networks
Interoperability occurs while communication carries on between two blockchain-based networks. The ideal example can be – someone within Bitcoin holding BTC and wanting to transact on an Ethereum blockchain environment, which is compatible ETH value. The process is possible, but becomes tedious as it involves registering and other manual steps.
This issue is not so much unique, as blockchain networks generally operate as standalone networks dedicated for a particular purpose. But there has to be an interoperable solution in place for a blockchain to reach its full potential in delivering benefits for business operations and transactions.
A handful of solutions have emerged to address the interoperability between different blockchains. Some of the popular solutions are Blacknet, Cosmos, Polkadot, Aion, Lamden, Metronome, ICON, Wanchain, ARK, Quant Network, and Block Collider.
Almost every tech giant has started initiatives to offer solutions around blockchain technologies due to huge demand by every organisation. It entails:
- Need for enterprises to reduce time required for cross-border operations
- Reliable transactions of money and legal assets ensuring robust security
- Need for digital transformation of overall ecosystem keeping capex and opex cost within budget
- Ensuring and improving privacy in the connected world
Like any other technology, blockchain will mature with time and involvement by private vendors and open source communities. As per Gartner’s hype cycle for emerging technologies published in 2017, it will take five to 10 years more for blockchain to get implemented to its full potential.
You can read more about this topic in the Calsoft eBook 'Blockchain: Towards Agile, Secure, Decentralized & Distributed Network' here.
The post Adoption of Blockchain and Interoperability Challenges appeared first on Calsoft Inc. Blog.
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