Blockchain
Blockchains for enterprises
Blockchain has got a lot of press in recent years and has become a key technology that is being discussed in boardrooms of enterprises particularly those in the financial and supply chain domain.Blockchain – the technology that we all get excited today about – is the Nakamoto Consensus Blockchain (NCB) and has limited value today in commercial applications except for the cryptocurrencies like the Bitcoin.
We are excluding public cryptocurrency blockchains from our discussion here - these are currently being viewed as a store of value rather than medium of transactions, and have gained considerable traction in recent time.
The true value for enterprise implementations currently lies in the Distributed Ledger Technology (DLT) for Blockchain that is being adopted by corporates. This is where the true commercial value of blockchain lies in current implementations by enterprises and are far cry from the Nakamoto Consensus Blockchain implementation (which is at one extreme of being "public" and "concensus" oriented). These solutions are neither trust-less (they have trusted parties or notaries) nor are permission less (allowed only to verified users) and as such are commonly called Permissioned Blockchains.
The Permissioned Blockchains have several advantages when compared to the NCB. The key advantages include the presence of know actors thus avoiding AML and other illicit activities, ability to introduce rules related to privacy and offer higher speed, throughput and scalability to the solutions based on Permissioned Blockchains. It is sometimes called Enterprise Blockchain given its acceptances among enterprises and its closed nature compared to something Public.
With Nakamoto Consensus out, the current implementations are then reduced to implementations of Distributed Ledger Technology (DLT) for Blockchain. This eventually boils down to a problem of Digitization and Standardization of systems which alone can improve efficiency in any system including banks.
With Nakamoto Consensus out, the current implementations are then reduced to implementations of Distributed Ledger Technology (DLT) for Blockchain. This eventually boils down to a problem of Digitization and Standardization of systems which alone can improve efficiency in any system including banks.