Where blockchain is gaining momentum

Main visual : Where blockchain is gaining momentum

It might come as a surprise to you that despite all the hype and the world of possibilities around blockchain, CIOs have yet to consider it a priority. Yet that is what Gartner analyst David Furlonger noted at Gartner Symposium/Xpo last fall in Orlando, USA.

And just five percent rated it as a game changer for their organizations according to the Gartner 2019 CIO survey, far below artificial intelligence, cloud, and data and analytics. What’s more is that so far, only 11 percent have deployed or will deploy blockchain in the next twelve months.

But that’s far from saying that there is no excitement or interest. As Gartner also notes, “Blockchain is developing quickly”.

My view is that this is being driven by a new, pragmatic emphasis on process optimization, integration with existing platforms and the availability of Blockchain-as-a-Service (BaaS) platforms to transform those processes; emerging regulation and industry standards and a new emphasis on interoperability between blockchains and platforms.

There’s no escaping that the hype of recent years has created a certain degree of phobia and reluctance in the enterprise market when it comes to blockchain and Digital Ledger Technology (DLT).

It is easy to dismiss any emerging technology as a passing fad – especially when one of its highest-profile elements, Bitcoin, has been so heavily hyped and prone to speculation. However, there is a positive side to that situation: it has also created an opportunity to drill down to the true use cases with real benefits, just by asking the right questions and taking a sensible down-to-earth approach.

It is incredibly invigorating to ask those questions and to “challenge the status quo and understand the why”, as motivational speaker Simon Sinek would say, and engage with the real issues and use cases that truly transform business models and processes.

When you do, you will see how the hype aversion falls away as the truly tangible benefits come into focus.

In the conversations we are having with customers, they are starting to understand the underlying technical principles, although that is actually less important than the fact that 80 percent of the discussion today is about changing the approach to a business challenge and the business impact this can have.

Blockchain-as-a-Service platforms

Getting to benefits faster is one advantage of BaaS. It reduces the number of hurdles to be jumped to get to the benefits and creates acceleration that really does facilitate adoption and rapid prototyping.

The new FujitsuFlow suite of BaaS offerings is a practical example of how this works.

The first offering in the suite is Fujitsu InvoiceFlow. This enables enterprises and government agencies to avoid - and frequently eliminate – the very real issue of accidental data error and the increasing problem of invoice fraud.

Procurement fraud is estimated to cost UK business alone £127 billion a year, with the use of so-called “crime-as-a-service” gangs on the rise – where an invoice scam can be set up in less than a day with the cyber-criminals accepting a percentage of the gains as their fee. Fujitsu InvoiceFlow eliminates the threat of scams by cryptographically joining a buyer’s purchase order, any related payments and all related invoice data from the seller for the entire lifecycle of the account.

Only a few weeks ago, the news was full of stories about a scammer who netted a total of $122m from Facebook and Google, simply by sending false invoices. This is something that InvoiceFlow can help prevent from happening elsewhere.

That's only the first in a suite of as-a-service DLT platforms that the Fujitsu Blockchain Innovation Center is currently developing. Although I’d love to tell you more, you’ll have to watch this space for the next announcements. And if you like, you can simply have the platform as a service, that is without a Flow application, either fully-managed or managed by yourself, in the cloud or on-premise.

Both approaches – cloud-native applications or platforms – remove complexity from the underlying ledger platform, lowering risk and making implementation easier. For example, our teams are working with a large manufacturer on a rapid Proof of Business (PoB) productization frameworks using BaaS to accelerate the POB itself, with Fujitsu able to provision the platform in just minutes during the preparatory meeting.

The output of Fujitsu’s extremely rapid blockchain productization framework is the development of a Minimum Viable Product (MVP) in just five days.

Our goal is to create the potential to jump-start new blockchain development, or to de-risk existing blockchain projects. This approach, a preliminary step before committing to a full project, avoids many of the common pitfalls of blockchain projects and focuses on creating business value prior to engaging larger resources

Blockchain distributed data storage

The decentralization at the heart of blockchain and DLT is what underpins the greater trust and security promised by these technologies. Data is not held centrally – under the control of a single entity – but distributed across multiple nodes in such a way that it cannot be manipulated by any single actor.

Originally conceived as a method of storing value and assets, the technologies quickly broadened out to include transactions and contracts and their underlying data. Blockchain and DLT storage is now coming to the fore as a method of bringing greater security and trust to data storage itself, using exactly the same principles.

Combining the mature technologies of storage with the innovation of blockchain and DLT networks, highly-secure data - critical corporate documents, health data or even digital keys, for example – is spread across nodes, so that an attacker who gains control over one or more nodes does not create the ability to reconcile the data.

Prominent among the new techniques to achieve distributed storage are concepts such as ‘sharding’ and ‘swarming’.

Sharding cuts data into several small fragments, to be easily transmitted and recalled. Swarming keeps groups of shards together. While a blockchain employs a network of nodes, decentralized storage employs a collective group of nodes — or a ‘swarm’.

By retrieving data in parallel from the nearest and most convenient nodes, swarming lowers latency and increases performance. Other advantages include greater scalability and reliability.

At this stage, blockchain data storage is not addressing high volume storage – there are other, better solutions for that. Ledger technology does enhance data storage in certain important dimensions, including validation and audit trails, and Fujitsu already provides as-a-service solutions for digital information and digital asset exchange today.

Throw the box away, far away

Perhaps the biggest hurdle with blockchain and DLTs is getting people to treat them as they would any other new technology. Do they confer benefits at acceptable risk - yes or no? Seeing through – or just forgetting about and ignoring the hype, without throwing everything out of the window, is what’s needed. 

I frequently advise customers to open their minds during ideation stages (what I actually say is “stop thinking outside the box – throw away the box and think again”). During the realization phase, however, it is vital to recognize that any blockchain and DLT application today is most likely to be a supplementary platform and one must ensure proper integration with existing systems.

There are real opportunities today, not only for greenfield players with the option to go directly to fully decentralized (Ethereum or others) solutions but also for distributed (Hyperledger fabric and others).

If Gartner is correct, 11 percent of organizations are currently addressing those opportunities. It won’t be long before we see the transformative effects of their work. Used wisely, these are tools available to all players – greenfield or incumbent – as tools to face the challenge of digital transformation and enhance its effect.

If you would like to find out more about the extremely rapid blockchain Proof of Business productization framework, which includes the development of a Minimum Viable Product (MVP) in just five days, please contact us.