Why Blockchain is the Future of Enterprise Solutions
The future of enterprise tech is blockchain. Blockchain is the next big thing in enterprise technology, according to IT company Gartner, thanks to its flexibility, scalability, and “transparency.” Enterprise applications might see use for innovative blockchain platforms, if implemented correctly to make the most of its capabilities.
In the early days of the public blockchain market, you had a large company (IBM) that built a blockchain solution (hyperledger). They wanted to use blockchain to power parts of their enterprise. They had a lot of success with a handful of customers, and a very clear understanding of how the tech could benefit their organization. They were able to demonstrate the value proposition for enterprise customers and show how blockchain could be the right technology fit.
One problem that the early blockchain companies shared with many other startups is that they didn’t want to build anything that needed to scale quickly, and were unwilling to build something that was not suitable for enterprise users.
Over time, large enterprises in the field of cloud computing were able to build a variety of use cases for scaling up and taking advantage of many unique enterprise needs for blockchain technology.
One problem that many early blockchain companies had was not having anything that could scale. The early companies had limited reach, and limited scaling on the technology they were working with.
However with the growth of enterprise interest, blockchain technology has become both technically more capable but also widely applicable. Large enterprises and platform providers have built blockchain solutions that are able to scale very quickly. Most importantly, these enterprise solutions can be tailored to meet customer needs.
It Is Possible to Build a Cloud Native Blockchain Infrastructure That Complies With Enterprise Needs
The scalability problem that large platforms experienced was a lack of processing power available for running blockchains. Until recently, a single node has been the best that was available, where a single node provides enough computation power to perform the majority of the computation for the entire network. If there are multiple nodes making up the network, multiple independent shards and nodes are used. In the old days, the network would be split into several shards and then the shards would be used to perform the computations for the network, as there was only one node available (per shard) and no other computing power available to it.
But in the modern age, there are multiple ways of combining compute power into a single node. The current consensus algorithm for bitcoin is to use one large shard and one small shard. Each shard would have one single set of private keys, and one unique public key. Thus, even though we have more computing units available by combining more shards, we have only one public key.
What if we could combine all the shards of a blockchain in one node, using a consensus algorithm that was completely different from the traditional blockchain consensus algorithm? This would allow all the shards to share the same public key, so everyone in the network would have the same public key. Since all shards have the same public key, everyone can use the same transactions. There is no need for multiple public keys (private keys), one per shard, and one public key per transaction.
This solution to scalability is called sharding.
But you also have the scalability problem that large companies like IBM solve as well. This is about the rate at which information can flow across a multi-tenant application.
This solves the scale problem that large enterprises have had for some time when thinking about implementing blockchain. They built large-scale systems where compute resources are spread across many different tenants. This type of system is where virtual machines are the building components.
What do enterprise applications need to understand about blockchain technology?
With today’s blockchain technology, people are beginning to envision a world in which every corporate decision can be transparent, accurate, verifiable, immutable, time-bound, and decentralized.
For decades, we have seen the emergence of public key cryptography as one of the leading forms of cryptography. However, there are a number of ways that blockchain technology is fundamentally different. As we said, blockchain is fundamentally a technology that creates transparency across every decision and transaction. It creates a new method for creating “trustless” systems between parties, which allows them to reach a consensus across multiple parties on a matter before any one of them are able to falsify or introduce any bias factors. That is truly a different paradigm.
At the same time, blockchain is an incredibly decentralized and distributed system. When we talk about “transparency” in relation to blockchain, this means that when we are using a distributed database to store a transaction, as well as an associated database that provides the network for the transactions—you have a “transparent” system. A system where everyone feels really comfortable with the fact that they have shared data from a transparent point of view.
However, once you connect a bank account and an account from a cloud service provider—they are fundamentally different. When you think about these two “systems,” these are two different infrastructures and two different points of view for how the data is held for your information. Even if you agree on what information you want to put in that system, if you are using a distributed database, if you are providing another distributed service like Coinbase Wallet, you still have to deal with a number of different parties. So the question becomes: When you are making a decision, how do you know that you have trust with the parties involved? How do you know that you have complete transparency?
A system that enables every corporate decision to be validated and verified, which guarantees that everyone is making the decisions that they both agree to after extensive due diligence, and that we actually are making those decisions for the benefit of everyone, including shareholders.
We also want to ensure that the blockchain data can be kept in “one place” for as long as possible. As long as data is decentralized, data can be copied and spread around the world and that information can be kept for a long time.
Another really interesting thing that is happening with this technology is related to tax policy and compliance. That is another area where blockchain is really useful and could even be transformative if done correctly.
People are always concerned about what happens to their data: Who will maintain their data? If they don’t have a data store of some kind, how are they going to be able to use the blockchain? But the key here is that blockchain is not designed to address problems of data management, per se, it really is designed to address problems of trusted and secure storage of data.
What about regulation
Blockchain technology is changing regulation-heavy industries, where more than half of assets are controlled by people.
"Every dollar spent on blockchain is at least one dollar saved in red tape and compliance," is a phrase that seems to start to make more and more sense when thinking of why blockchain can be great for compliance.
Blockchain's impact is changing business and political dynamics in many parts of the world. It could one day replace corporate and government records. It could improve the speed and accuracy of online voting systems in emerging market countries. And it could be used as an open-source tool, allowing people the power to control their identity.
There are other applications that may eventually use blockchain that are on the future horizon, including smart contracts that would make government, industries and insurance companies more efficient.