IBM’s Middle East and Africa vice president of cloud, Maged Wassim, explores how blockchain could transform the financial industry.
It goes without saying how much the Internet has transformed business and society. While we once passively consumed goods and services, today we also actively review and comment on them – and businesses are listening to customers.
Yet the basic systems of how people and organisations formalise deals with one another, first codified by the Babylonian King Hammurabi in 1754 B.C., have not been updated for modern times. In fact, with each passing generation, we’ve added more middlemen, more processes, more checks and balances, and more layers of complexity to our official agreements – especially with financial transactions.
We’re pushing archaic manual procedures through a new network made of wires, but blockchain could change all of that.
Blockchain is popularly known as the technological foundation behind Bitcoin, the crypto currency that has been the subject of much interest and speculation within the technical, business and law enforcement communities, as well as society at large. The tide of interest, however, is now turning to blockchain, because it has the potential to rework the old order of processing transactions by eliminating middlemen and saving costs.
Blockchain-based systems could help radically improve whole industries, beginning with banking and insurance, to be used for corporate loans and international trade finance. But its impact could be much broader. It could make a difference whenever valuable assets are transferred from one party to another and whenever you need to know that a piece of digital information – anything from electronic artwork to the terms of a business agreement – is unique and unchangeable without the agreement of all parties or need for a central authority to approve transactions.
Many industries and use cases can be revolutionised with blockchain. We believe for blockchain to fulfill its potential for businesses, they must be built using open technology standards to ensure the interoperability of systems and developed open source software so as not to suppress competition. There are several open source blockchain projects, but only the project managed and sanctioned by the Linux Foundation, The Hyperledger Project, offers industry-friendly terms and multi-company governance.
Only with openness and the contributions of developers around the world will innovation flourish and will blockchain be widely adopted. There is profound interest in this fast moving technology and unlimited potential for developers who master it to reinvent how transactions of all kinds are done.
That’s why we contributed code to the Hyperledger Project. New tools for developers can help spin up a network in minutes so developers can focus on building real-word applications for blockchain.
Only time will tell if I’m right, but I see blockchain as one of the most transformational peer-to-peer technologies to emerge since the Internet itself.
