Will blockchain surpass Bitcoin and become the next hot topic?

Introduction

Since the virtual currency Bitcoin was launched in 2009 , it has been sought after and hyped by the capital market. The "blockchain" technology, an important technology used in the development of Bitcoin, has also been increasingly valued by the commercial market with its application and development in recent years, and is even showing a trend of surpassing Bitcoin.

　How to understand blockchain

Blockchain is the technology that powers bitcoin, but it may become more important than the cryptocurrency. Venture capital investment in pure-play bitcoin blockchain startups fell to $ 1.1 billion in the first quarter of 2016 , according to industry research firm CoinDesk .

The easiest way to understand blockchain is to think of it as an improved version of the general ledger, which has been the core accounting tool for business transactions since ancient times. The general ledger records the changes in assets, whether it is a bundle of land assets or shares in a company. But this tool also has a big limitation: there is no access to the data collected. On the surface, it is for security reasons, but also because this is how the custodian makes money.

In the cloud, a distributed network of ledger accounts is possible for banks or supply chain companies, allowing all authorized participants to share information without going through any intermediaries. Another advantage of using blockchain systems is that they are more secure because criminals cannot gain access to a blockchain network by taking over a person's computer. However, criminals have recently successfully attacked some banks in Asia by forging information on the Swift platform, a platform for banks to communicate with each other. In February, criminals used this method to steal $ 80 million from the Bangladesh Central Bank. "The risk of blockchain being hacked is generally low," said Richard Johnson , a market analyst at Greenwich Associates. " No one has ever hacked Bitcoin." Richard works as a market analyst at Greenwich Associates .

Starting in September, logistics companies in Finland, Sweden, Estonia and Latvia will add can-sized “tracking” devices to their shipping containers. The devices will send the cargo’s real-time location, vibrations during transit and the temperature of its surroundings. All this data will be uploaded to a cloud-based data warehouse, so that the entire supply chain can be fully understood, even if there are delays. This will reduce unnecessary emails and phone calls. “There are countless troubles in communicating between companies, ” said McAlami, who reflected on some of the projects she has participated in at Kouvola Innovation , a trading company in southern Finland . “Why can’t we use a blockchain to replace these decentralized databases so that we can all share information?” Kouvola Innovation is a trading company in southern Finland.

Business applications of blockchain

1. R3CEV

R3CEV is a partnership of 45 companies. The 45 companies that make up the alliance include JPMorgan Chase Group, Barclays Bank , and Wells Fargo Bank. R3 is committed to developing blockchain applications and commercializing them. In February 2016 , the New York-based company announced that it had successfully simulated a digital asset transaction on its internal network across four continents. Tim Grant, general manager of R3 , said that blockchain technology can speed up the process of transferring assets from one party to another, including cross-border transfers. He said that because the current transfer systems and operating procedures are too old, a cross-border transfer transaction usually takes several days to complete. He pointed out: "Through the distributed ledger, blockchain technology can transform such a manual process into an automated process in a secure and transparent way, thereby improving efficiency; our company is committed to eliminating these inefficient operations."

2. John Hancock Financial

JohnHancock Financial is a Boston-based company that sells insurance and mutual funds. The company is also experimenting with blockchain. Ace Moghimi , the company's head of innovation for North America , said that four employees in the company's lab invented a virtual currency for rewarding employees, which employees can use to buy gift cards. He said, "Blockchain is a technology with great potential; what we need to do now is to accumulate technology in this area and find suitable applications."

3. Deloitte

Deloitte has built a new airline frequent flyer reward program system (currently still in the experimental stage) based on blockchain technology. This new system allows for arbitrary adjustment of discounts and additional conditions to facilitate passengers; for example, passengers on flights that cannot take off for some reason can use airline miles to pay for restaurant meals during their stay at the airport. Eric Piscini, a chief consultant at Deloitte , said: "With this system, you activate a new set of customer experiences and customer behaviors; and this will bring you new revenue."

If these applications are successful, it will greatly boost the global cloud services market, which is already worth $ 175 billion a year.

4. Microsoft

Microsoft began providing developers with tools to quickly develop these applications last fall. According to Marley Gray , head of Microsoft's blockchain business development , there are now 5,000 blockchains on the company's servers, compared to just 50 last December . IBM has made the code for blockchain technology open source and currently has 1,000 active users. Jerry Cuomo , the company's vice president of blockchain technology, said: "The demand for blockchain is so great that it's a bit crazy."

Despite all this excitement, blockchain faces many obstacles. Speed ​​is one of them; blockchain technology is slow for large volumes of transactions. Integrating such a new technology into existing systems can also be a challenge. And there will be regulatory resistance to the technology's adoption.

Deloitte's Piscini believes that the recent hype about blockchain technology has also caused some confusion about the technology, including where it is good and where it is not. He said, "Every client who comes to us says, we have a problem and we need blockchain to solve it, but what they really need is other technologies."

Opinion "Suddenly you can create a completely different customer experience and behavior model, and this can also increase your revenue." Eric Piscini, Deloitte "Blockchain technology is estimated to save billions of dollars a year in securities trading and other asset transactions." Gil Luria , investment bank Wedbush Securities "Blockchain technology today is like the Internet in 1995. Companies should have the courage to try to use technology so that they can do things they couldn't do before." Gilles Gravier , Indian outsourcing giant Wipro If you need to reprint, please contact us (email: [email protected]). The public account that is allowed to reprint please indicate the author and source in a prominent position (reprinted from: Big Data Digest | bigdatadigest), and place a conspicuous QR code of Big Data Digest at the end of the article. We will pursue legal liability for unauthorized reprinting and adaptation .