Technology Reseller v09

01732 759725 BRIEFING 32 Businesses today are becoming more interdependent – not just for mission-critical tasks, but also for services or products that carry legal liability Along with financial transactions, blockchains can hold code that’s triggered automatically when new blocks are added to the chain. This practice is called a smart contract, because these code blocks are typically used to enforce rules or execute actions dictated by legal contracts. For example, a rule to release payment when, and only if, all goods ordered have been signed as delivered can be encoded into the blockchain rather than relying on a user to monitor the order and send payment. Smart contracts can also be used to propagate data from one blockchain to another (beyond any replicas), thus creating a business ecosystem automated and secured by a collection of blockchains. Types of blockchain Corroborating the accuracy of a blockchain without a central authority that bears responsibility (and also usually controls the single system of record) requires all replicas in the blockchain to formulate a consensus about which entries are valid or invalid. This is tricky to accomplish for widely distributed replicas and the consensus process can take a long time. This is one reason why there are two kinds of blockchains – unpermissioned and permissioned. Unpermissioned blockchains (aka permissionless) have no owner per se, and entries can be created by anyone. Bitcoin used an unpermissioned blockchain because all participants have identical copies and every user can access the complete transaction history. All replicas in an unpermissioned blockchain participate in the consensus process. Unpermissioned blockchains avoid censorship, where someone in authority decides which transactions to accept. Permissioned blockchains typically have one or more owners and the consensus process can (optionally) be carried out by a smaller set of trusted agents – like Governments or banks. Only authorised parties can validate transactions, and access to transactions can be restricted to certain participants. Permissioned blockchains are very amenable to businesses because the consensus process is much faster and it’s easier to control who has access to sensitive data. How ready are businesses for blockchain? Businesses today are becoming more interdependent – not just for mission- critical tasks, but also for services or products that carry legal liability, for example food providers that need proof their suppliers are correctly processing ingredients. The maintenance and repair of critical machinery, like airplanes and surgical equipment, requires staff with provable certifications. Home mortgages are touched by a large number of entities that, to this day, do much of the work on paper forms. When a problem occurs, for example an E. coli outbreak or a jet engine malfunction, it can take weeks for all parties to sort through their records to determine the root cause. Using a blockchain ledger provides a single, shared place where all constituents in a business chain record their actions. The record can be constantly checked by computers looking for problems – like a wrong part mistakenly installed during maintenance. For manufacturers and distributors that ship across borders, simply delivering goods can generate dozens or hundreds of paper documents describing critical aspects of the process, like routes taken, customs declarations, insurance riders, hazardous material documentation, sourcing documents and certifications for carriers of special cargo. Digitising ...continued continued...