The Future Is Decentralized?
Tarun has 19 years of rich experience in managing IT landscapes for Automobile component manufacturing, Wholesale and retail channels, eCommerce. His working portfolio includes IT vendor management, datacenter management, project management, CRM & loyalty, BI, SAP.
Blockchain is a database & platform which stores chain of unique transactional chunks with time stamps as distributed ledgers among network of commuters called nodes in decentralized controls. The underlying technology ensure that data integrity should be intact and remain consistent across participants. It is comprised of several pieces: a database, software application & connected computers.
There are reasons for making blockchain so popular because of resiliency, reliability, fraud prevention, transparency and collaboration architecture. The first use of Blockchain is reported way back in 2008 which described it as a “purely peer-to-peer version of electronic cash” known as Bitcoin, by Satoshi Nakamoto of Japan. Sometime term bitcoin and blockchain is used interchangeably but this is not the case.
The underlying technology of blockchain’s decentralized data management has been grown over from Public to Private and Consortium blockchain and further extending its usageto closed loop applications for an enterprise or between group companies but itsdefeat the purpose of decentralization since in private or consortium blockchain single entity controls the environment with restricted data accessibility & authorizations but actual idea is to leverage the backend architecture which can handle the vast transactions in low cost hardware modelswith data transparency, consistency, integrity & audit trails.
In the advent of Private & consortium blockchain its potential uses has been increased multifold in the different capacities of the business other than just restricted to cryprocurrencies. Here I would not be focusing on bitcoin but will share insights its application in various public & private domains like Supply Chain, Health care , Telecom & Public sector entities .
Usage and Adaptation:
• Traceability of parts, components in entire production lifecycle
• Maintenance of parts, equipments and measuring shelf life
• Electronic compliance records & tracking
• Storage and retrieval of tamperproof sensors raw data
• Maintaining Electronic Health Record
• Anti-counterfeit track & trace for drugs and shelf life
• Monitoring health profile and implants
• Telecom roaming & Interconnect billing
• Electronic SIM
• Government records (titles, birth certificates, licenses, etc.) sharing
• Customs (import/export licensing, excise taxes)
• Regulatory certifications (food, pharma, etc.)
• Smart cities services
With the above example we can see its usages mostly with high volume of data what IOT sensors are generating or between organization which may require dependent data flow across multiple parties where trust, transparency , consistency and integrity of data is most important and critical.
Decentralized Blockchain Networks May Provide A High Level Of Security Over Data Access Between Authorised Parties
Challenges and Limitations Scalability:
IoT’s may generate huge sum of data down the years and handling scalability over multiple nodes is tough task and may face data retrieval issues.
Security & Privacy: Decentralized blockchain networks may provide a high level of security over data access between authorised parties, but IoT devices themselves have to be secured to prevent hackers from tampering and re-distribution of data across nodes.
Interoperability: Cross-chain interoperability has to be architecture if we want to leverage the actual benefits of data over public or cross company domain. If this is not provisioned or build from the start we may end up with multiple siloes networks failing the idea of data collaboration.
Legal, compliance and regulation: The allocation of responsibility & regulation has to be closely examined and aligned. Since these databases may have sensitive datalikemedical device implantsof a patients, critical maintenance logs of machineries which takes an action based on certain rules & algorithm or activity of dependent IoT’s. In case of any tempering may end up causing the patient or person or machine in harm. Since most of the IoT platforms are blockchainbased, without a controlling of single entity, so identifying and blaming accountable party is little bit difficult.
Why is still it is being adopted?
Yes there are certain reasons and use case for going into Blockchain environment as described below:
• If business exchanges data and have workflows across group companies or third party systems.
• If thereis a trust deficit between transacting parties of data exchange.
• If transactions involve intermediaries, aggregators charging excessive fees, or adding compliance risk or delays.
• If transactions requires periodic reconciliations because of data inconsistency between source and destination systems.
• More traceability or audit trail required for regulatory purpose.
• If it requires real time visibility of the data flow between multiparty transactions.
•If it requires automation of workflow for repetitive steps between parties.
Although Blockchain technology is well-suited on case to case basis but it cannot take over the traditional database systems and approaches which are still better than blockchain in certain capacities. Now it is very crucial for every organization to understand what they want to achieve with different approaches & methodologies and should review the strengths and vulnerabilities of each kind of solution with due diligence. They should not just follow the crowd blindly.
Blockchain is overhyped but certainly it has great potential. Companies have just started its adaptation and system will improve further to take care of mentioned risks. Blockchain project can really be a solution for many problems over data authenticity but it corrections will take some more time before coming to SME’s or other business enterprises.