Forget Bitcoin! Blockchain for the Business
Blog: The Tibco Blog
Possession is nine-tenths of the law, right? Thanks to new technology, this old adage may no longer be a viable way to settle property disputes. Artists and enterprises have long struggled to prove ownership of their work after it has been disseminated, especially when it is uploaded online. The problem persists in physical goods too—counterfeits are made to appear nearly identical to their authentic counterparts. For retailers, this causes huge profit losses; more than $250B worth of counterfeit goods were seized in 2014 alone. What if there was a reliable way to track asset provenance with absolute certainty from creation to marketplace and beyond? How could such a technology benefit the enterprise? The reality is that this is already possible with the help of blockchain and the benefits to the enterprise are many.
What is blockchain? Let’s follow an asset through its lifecycle to learn more.
Blockchain is a way of recording information, such as contracts, stock trades, health information, and asset provenance, on a distributed ledger that cannot be modified after it has been written. Instead of one centralized database that contains the information, it is all hosted on each node in the system. Better yet, every node in the distributed network autonomously agrees that the information is correct, and has access to it at all times. Let’s take a look at one use case to learn more. Now, say my imaginary friend Bill (I can’t use Bob for obvious reasons) creates an asset. He can then assign a unique identifier to that asset so that it can be uploaded to the blockchain as a transaction. This asset can now be traced back to him indefinitely. The blockchain is comprised of transactions that cannot be modified or removed once added.
Blockchain transactions are grouped into blocks. Blocks are added to the chain by the network miners, working together to confirm that they are valid. Each block has a proof-of-work associated with it. This means that the network miners must perform some work to prove that they are striving to confirm valid information into the ledger. The idea here is that the nodes working to confirm valid blocks are overpowering ones attempting to attack the system by confirming false blocks: strength in numbers. Bill’s creation of the asset is written into the blockchain and secured into a block. Now, all of the nodes in the network contain an updated version of the blockchain to show the addition of Bill’s asset.
Bill now has the ability to confidently transfer this asset to anyone. Each time it changes hands, the transaction is written to the blockchain to show new ownership. Therefore, the new owner(s) can trace previous ownership all the way back to the creator, Bill. The transaction history cannot be edited, tampered with, or modified in any way due to the secure nature of blockchain. In the enterprise this can help track the origin of goods to ensure sustainable use of raw materials, provenance of intellectual property, physical or digital asset tracking, recovery of stolen goods, and more.
This may greatly increase the speed at which intellectual property claims are settled, provide better supply chain transparency, and increase the value of products by providing a clear history of where they came from. Will possession continue to be nine-tenths of the law? Or are we on the cusp of being able to prove all ten-tenths of ownership using blockchain?
This is only one exploratory use case for the decentralized technology and the possibilities are endless. How else can asset provenance benefit the enterprise? Let me know in the comments.