Managing blockchain technology with IT
Everyone’s talking about blockchain technology, which has startups and established companies dreaming about making big money and developing new business models or improving existing ones. With this in mind, CBA Lab created the “Blockchain” workstream at the end of 2017.
This workstream focused on three objectives:
“It’s traditionally been the case that anyone conducting transactions in a market needs to use an intermediary. If the transaction involves money, this intermediary is usually a bank. For ordering products, it’s a platform like Amazon, and in the case of information, you could say that Facebook acts as a central authority. The same role is often played by notaries in the case of transactions involving formal contracts. The invention of blockchain technology has basically made such intermediaries unnecessary. With blockchain technology, market participants can transfer assets from A to B without having to use a central party like a clearing house or a bank. Blockchains enable the execution of secure transactions that are completely tamper-proof and cannot be altered after they’ve been completed.”
The Workstream selected the aforementioned objectives because its members believed that a large amount of information still needs to be collected on relevant technical systems and possible application scenarios. More specifically, CBA Lab would like to find out how architecture management can put blockchain technology to use in an effective manner, and how blockchains can be managed by IT systems. CBA Lab also wants to analyze the technology’s attributes and learn more about how companies are already using the technology, how the provider landscape is developing, which frameworks already exist and, of course, how blockchains can be integrated into the existing IT landscape.
Blockchain technology was invented nine years ago in connection with the development of the cryptocurrency Bitcoin – and the things the technology makes possible in areas unrelated to the digital currency are truly remarkable. Blockchain technology can theoretically be used in numerous supply chain scenarios. It could also do some amazing things when it comes to the traceability of food or pharmaceutical products, and it would enable the automation of many contractual processes and financial industry transactions. A large number of startups are already using the technology today to either implement entirely new business models or make existing ones more efficient. Everledger in the UK is one such startup. The company registers luxury items (at the moment mostly diamonds) and uses blockchain technology to make them virtually impossible to steal. It does this by digitalizing 40 important characteristics of a gemstone, for example, and then storing these in a blockchain transaction.
Doing this ensures that every participant in the blockchain in question knows at all times where the stone originally came from, who has owned it in the past, and who the current owner is. Most of the startup’s customers at the moment are diamond traders and insurance companies.
Other companies besides startups have long since discovered the benefits of using blockchain technology, however, and such companies also include members of CBA Lab, some of which make very extensive use of blockchains. That’s why the exchange of knowledge and experience between the workstream participants was considered so important and therefore made one of the primary objectives. For example, those workstream participants who had already worked with blockchain technology discussed their experiences in order to deepen everyone’s understanding of the technology and how it can be used in practice. Those less familiar with blockchain technology were able to contribute their knowledge of technology and innovation management in order to help the workstream develop ideas on how to integrate blockchains into existing IT landscapes.
Because blockchains are based on an innovative and cutting-edge technology, it’s still not completely clear just how far the scope for their application might extend. For example, how will the technology impact existing and new business models, and how can it be integrated into enterprise IT systems? The workstream addressed these and other questions.
The person who invented blockchains has chosen to conceal his or her identity. He or she uses the name Sakoshi Nakamoto, but no one knows who this might be. Speculation on Nakamoto’s true identity ranges from any number of Australian entrepreneurs and American scientists to Tesla CEO Elon Musk.
The workstream summarized its results in a “Blockchain Guide” containing the following elements:
Detailed work results are available exclusively to CBA Lab members.