Blockchain, the Fundamental Technology for Today’s Assets Management

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By Karthik Ramarao, Founder and CTO, Empirical Data Private Limited

Businesses never operate in isolation. They always work and interact with other businesses, governments and financial institutions. And this interaction effectively generates wealth by the flow of services and goods across these organisations.

This fundamental network of organisation is where blockchain is applied. It brings organisations closer to each other, to work more efficiently for a common business cause.

Assets of whatever type- tangible, like goods, intangible, like financial instruments, or cash- are what move between these organisations, creating wealth at each step. Today, the system of record of these movements, or ledgers, is maintained and reconciled by individual organisations, leading to a host of challenges and trouble- disaccord due to differences, spending & claiming what is not there, lack of accountability, and misuse, to name a few.

Blockchain as a technology has the potential to absolve, mitigate and address with speed these shortcomings. Blockchain builds an invisible fabric of trust between businesses. It redefines how businesses interact and propels faster growth.

At the highest level, blockchain is a shared, mostly immutable and incorruptible, and continuously reconcilable distributed ledger. A key-value data store. It has built-in robustness and no single point of failure. It has stood the test of time. Cryptocurrencies, which came into existence in 2009, are based on blockchain. No single point of control no single point of failure and moves several billions in the market.

An interesting flavour of the generally known public blockchain is a private or permission based blockchain.

These blockchains are lot more stricter on who can join the network. In a public blockchain, anybody can join the network, download the “data base” and engage on the network. An enterprise application may not prefer such a model and hence the permission based blockchain. These blockchains allow only authorised members to participate. They may belong to many different organizations part of the same blockchain network. But their credentials are registered and authenticated.

Empirical Data’s block chain Fusion Core is one such blockchain. We focus on enterprise solutions and hence a permission based blockchain delivers the optimum value. We will discuss some of these solutions below.

But before that, a word on IOT and Machine learning/Artificial Intelligence (ML/AI) from the perspective of blockchain. We now know that a blockchain can serve as a data store – although of a different kind. Integrating IOT with blockchain provides many differentiated solutions. IOT simply acts as a data generators. Data from IOT when filtered, authenticated and cleaned, can serve as a data source which gets stored in the blockchain. This combination carves out many new solutions that can enhance business operations. Likewise, machine learning and artificial intelligence can bring wisdom out of the data that is this stored. Machine learning, for example, augment security and performance while artificial intelligence can allow expedited business decisions.

One of the most important outcomes of having trusted data is the ability to apply programmatic rules. These rules are a representation of the business process. These programmatic rules (at Empirical Data it is called Self eXecutingContract And Logic – SXCAL and smart contracts elsewhere), is the business process view of the blockchain.

Here are some enterprise applications we have built on blockchain (the name in the brackets is our solution name) and integrating and combining with IOT, ML/AI. I will explain this with some specific use cases.

Contract and Compliance management Solution (Comet): Take a supply chain example or a pharmaceutical cold chain logistics example. There is a contract between the pharmaceutical company and a logistics company to move drugs with certain environmental and transport parameters. Blockchain serves as a great platform when integrated with IOT to measure the parameters. It is in fact an enabler for this solution. Data loggers can store data on the blockchain (this is a simplified statement of a detailed process as data is screened and loggers authenticated). Now the common contractual parameter data is visible to all stakeholders such as the pharmaceutical companies, logistics companies, insurance perhaps and maybe bank. Data is trusted and untampered and hence business rules can be immediately applied such as sending alerts, invoices, penalty statements etc. Actions can be proactive and immediate rather than reactive much after the event.

Philanthropy and CSR Solution (Redshirt): Here is another use case that is enabled by blockchain. If someone donates a dollar, most of the times they just trust it is put to good use. But now with a blockchain, a donor can get visibility of how the dollar moves and where it is getting used. The block chain has the potential to bind the donor and the recipient. This in turn drives more donor confidence into the philanthropic organization. Likewise CSR projects are many times outsourced to other agencies. Blockchain connects the corporate, the executing agency, an NGO maybe, a beneficiary, an auditor and a compliance enforcer on a common view of data. Thus ensuring proper utilization of humanitarian projects.

Healthcare Patient Record solution (Aether): The blockchain provides immutable record of events and actions. It connects all the ecosystem stakeholders to offer a once source of truth of all the events, records, activities, procedures, consultations, observations etc. which gets immutably etched into the blockchain. Whether it is from a wearable of the patient or it is medical instrument readings or prescriptions or medical images, anything desired can be captured with a timestamp and source data. And that stays forever. It can be acted upon programmatically or analysed medically or audited.

There are other applications of blockchain and in most cases blockchain is an enabler of the solution. That is, without a blockchain, the solution is not feasible or is extremely difficult to implement.

But do note that blockchain is not a panacea for all of our data storage and repository related problems. There are caveats and it may not be the optimum solution for some application. For example, performance is a limitation today. We have tested our blockchain to deliver about 1400tps which we believe is the best that a blockchain can be offer today. So it cannot replace a typical OLTP platform. Or it cannot be used to store volumes of data – it is a ledger at its simplest form. That being said, Empirical Data has integrated object based storage to our blockchain so that you can run blockchain friendly applications that need large and fast access storage.

Use a blockchain for what it brings to the table as a differentiator. They being, distributed nature, inherent immutability, no single point of failures, programmatic business rules and the others. Every time we discuss these with a customer, there are always business challenges that pop up that are not elegantly solved by any contemporary technology.

Quotes:

The effective interaction among businesses, governments and financial institutions generates wealth by the flow of services and goods across these organisations.

Blockchain builds an invisible fabric of trust between businesses. It redefines how businesses interact and propels faster growth.

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