By Naveen Sydney, CTO, hyperFIELD Inc
Blockchain technology has gotten tremendous attention lately for its industry-disrupting capabilities. As a result, many enterprises are rushing to try and incorporate blockchain into their ecosystem, so they are not left behind. There are also companies who are simply adding this buzz word to their existing offering and claiming that they are now blockchain ready/enabled etc.
Unfortunately, as with any emerging technology that is gaining momentum, there is a lot of confusion and misdirection. As a result, enterprises are spending a lot of time and money in a technology that might not be applicable to them or is the wrong use case.
In this article, I will try to provide a high-level overview of the technology, its strengths/weakness and outline some potential use cases.
So what is Distributed Ledger Technology(DLT)?
But wait, we thought you were going to talk to us about Blockchain! Before we venture into Blockchain we need to discuss the difference between Blockchain and Distributed Ledger Technologies (DLT). Blockchain caught on as a buzzword and is more recognized among the masses and commonly used interchangeably with DLT (although they don’t mean the same thing at all).
Distributed Ledger is a data structure which is stored across distributed/de-centralized devices, usually spread across various locations. DLT is a technology that uses a distributed ledger to store data, a specific protocol to achieve consensus and transactional code to change the state of the ledger. The storage structure, distribution methodology and consensus protocol used (Proof of Work, Proof of Stake, Directed Acyclic Graph, etc.) differentiate various DLTs.
In summary, Blockchain is a sub-type of DLT. All blockchains are DLTs but not all DLTs are Blockchains. Think all dogs are animals, but not all animals are dogs, the same with Blockchains and DLTs.
Why all the hype?
So now that we have covered the fundamentals of DLT and Blockchain, let’s see what the hype is all about. Historically, enterprises stored all their data in centralized databases, think Oracle, SQL Server, Mainframes etc. These solutions have evolved over the years to provide reliable, fast and successful data management solutions. Millions of installations and trillion of queries later, these systems have carved out a place at the heart of data management for most organizations. However, since the data is centralized, the custodian of the data has the keys to the kingdom and users have to rely on the organization for the integrity of the data(trust). Additionally, since the single instance of the database contains all pertinent data, it is vulnerable to hacking, thus making it less secure(security).
DLTs, on the other hand, are distributed and immutable (unchanging over time) by nature, and the data is secured using cryptography making it virtually impossible to hack. The distributed and immutable nature of the data removes the need for a centralized authority to govern the data.Since the community is now the custodian of the data, this brings trust to an ordinarily trustless environment. Since the data is replicated over a network and distributed, DLTs have extreme fault tolerance built into them. Given these innate benefits, you can see why everyone is excited and rushing to implement DLTs in their organization.
So what’s the problem?
If DLTs are so awesome, why shouldn’t my organization jump on the first chance to implement DLT/Blockchain? Before we decide, let’s recap the benefits of DLTs:
· Robust fault tolerance
· Secure collaboration of data
Do DLTs have any disadvantages? Yes, and the answer is performance. Due to the nature of the technology DLTs will ALWAYS be slower than centralized databases.
So if trust and fault tolerance are not an issue in your organization and performance is crucial to your operation, DLT/Blockchain might not be for you.
This article obviously has oversimplified the analysis needed before your organization can make a firm decision on the need for DLTs. A business must, of course, consider cost, schedule, willingness to collaborate across a business network, public vs permissions, ways to incentivize the community, etc. before making the final decision.
Enterprise DLT Use Cases
· Industrial IoT — Expose IoT sensor data to auditing agencies via DLT
· Supply-chain Provenance — Track products as it journeys through the supply chain on DLT
· Sensitive Data Document Management — Use DLT to author and distribute documents securely
· Asset Configuration Management — Track asset configuration over time on DLT to avoid errors
· Medical Records Management — Track patient records on DLT to facilitate data collaboration
· Controlled Drugs Tracking — Using a DLT to track ingredients, suppliers, distributors and patients
How can hyperFIELD help?
We know the implementation of emerging technologies, or even just finding out if they are right for your business, is a daunting task. hyperFIELD is made up of a team of industry and technology experts with years of experience doing just that. We specialize in emerging technologies like DLT (aka Blockchain), Augmented Reality, Machine Learning, Internet-of-Things (IoT) and Analytics. Feel free to reach out to us with any questions. We would be happy to sit down with your team and help you to identify what technologies would best suit your business needs.
About the Author: Naveen Sydney is a life-long entrepreneur and a pioneer of emerging technologies. He has over 20 years of experience in a variety of industries with a focus on enterprise management and technical innovation.
As CTO at hyperFIELD, he operates with a customer-first motto to connect businesses with the right solutions to increase productivity and profits. During the course of his career, he has consulted for Fortune 100 companies including GM, Microsoft and Raytheon, and continues to be sought after for advice in emerging technologies like Blockchain, Machine Learning, Predictive Analytics, Augmented Reality, etc.