A lot is being said about blockchain lately. Not a day goes by without an article about either someone who sold everything to purchase Bitcoin, or the fact the only people really making money out of this technology are conference providers to pundits predicting a revolution in finance, based on this quite simple technology.
At its core, blockchain represents a family of technologies which allow for distributed, secure, mostly anonymous and peer-to-peer ledgers of information. By using cryptography, blockchain technologies offer a way to remove central authorities from a series of transactions and deliver them across a network of peers, irrespective of geographical or political boundaries.
Removing a central authority such as a bank, government or even physical currency from a ledger of transactions securely is vastly different to how we do business today. Today, we are totally reliant on governments and central banks issuing and regulating currency, and banks regulating cash and credit flow, centralised in each nation state.
Blockchain not only removes these central actors, but also removes the geo-political boundaries and provides ways to transact without walls, boundaries, control or regulation.
On reflection, one would think these systems wouldn’t survive however, due to the construct of the technology, you can fundamentally trust the technology to deliver a secure and trustworthy result; even if you have little to no idea who the recipient of a transaction is.
As with anything new, blockchain technologies have some great advantages (e.g. nonrepudiation, customers paying on time etc.) but it doesn’t come without threats to the technology channel. A core threat, is the lack of infrastructure required to instantiate a working blockchain solution.
Let’s compare the core banking platform of one of Australia’s major banks. This consists of multiple significant mainframe computers working in concert to maintain the banks ledger. Blockchain will do away with this.
Theoretically, a major bank could manage their central ledger using a blockchain running on every bank-owned and client computer, securely and with honest customers being rewarded with interest or fees on their account. Such a system would cost a fraction of a core banking platform, yet would net a traditional integrator very little.
Health records are again open for disruption; as Blockchain is a secure and encrypted ledger, health records could be maintained in a distributed ledger, on the smartphone of every patient, with again little to no infrastructure required.
Major vendors are starting to introduce blockchain components into operating systems, meaning the applications of these will start to become ubiquitous.
If we take a look blockchain advantages, apart from the obvious ones of getting paid quicker and earlier using blockchain based currency (and which reseller wouldn’t mind being paid within 15 minutes?), the opportunity to work with customers to identify opportunities and implement solutions based on blockchain are growing. Smart resellers (just like those who adopted cloud well) will see opportunity, find applications and work with clients to implement for a fee.
Worst case, get paid in Bitcoin and just hope it continues its rise.
Whatever happens, this technology is nascent, is here to stay and offers some exciting disruption we haven’t yet thought of.
Nothing in this article should be considered financial advice. Bitcoin and cryptocurrencies are currently loosely or un-regulated and readers should make their own decisions before making investments.
Hear more on blockchain at CompTIA's next ANZ Channel Community meeting on November 8 in Sydney.
Nick Beaugeard is CompTIA ANZ Channel Community vice chair and CEO and founder of HubOne.