The classical journey from production to distribution of a commodity involves many intermediaries along the way – from government officials to lawyers, accountants, dealers, and banks. This complex crisscrossing network of transactions is subject to accounting, finance, transfer pricing, and other regulations. As a result, existing systems for recording transactions are complex, slow, and vulnerable to errors. Blockchain addresses these challenges by offering a secure and synchronized record of transactions.
“Blockchain is so profound it will do for trusted transactions what the internet did for information”. –Ginni Rometty, FinTech Ideas Festival Keynote, 2017
How blockchain works
To understand how blockchain works, it’s important to grasp two simple concepts of the technology: business network and ledger. The business network is formed by everyone involved in the business, such as customers and suppliers, in addition to cross geography and regulatory boundary. Whereas the ledger is a book or a computer file to record transactions and contracts. Transactions are transfers of assets onto or off the ledger. Those transactions are usually governed by contracts which state the conditions for transactions to occur.
Blockchain is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network.
How blockchain disrupts industries
Blockchain revolutionizes the way industries record data and transaction. Crédit Mutuel Arkéa in the banking industry used IBM Blockchain to create a distributed platform to record all identification documents collected by any entity of the Crédit Mutuel Arkéa group. This reduces the need for customers to repeat the identity proof process for each subsidery.
On the other hand, in the retail industry Walmart used IBM Blockchain to improve food tracking and safety. Digital information about food products from the farm to the store is recorded into the blockchain. This information can potentially help to address food safety issues with the products.
Develop a blockchain
Technology is continuously evolving. It is important for developers to keep up with the technology and gain the skills that every business will need. To learn about Hyperledger Composer and other tools that interact with a blockchain network, developerWorks offers the course IBM Blockchain foundation developer. Ishan Gulhane also created an IBM Code pattern to help you get started with blockchain. This code pattern starts by showing you how to build a blockchain network using Hyperledger Composer. Next, learn how to manage transactions by creating and executing smart contracts on the blockchain app that you built in the first part of the series. In the third part of the series, learn how to generate notifications automatically when something happens to the shared ledger.
The opportunities and future business functions for blockchain are endless. Join the discussion and let me know how you think blockchain is disrupting industries.