Diamonds. Bitcoin. Pork. If you think you've spotted the odd one out, think again: All three are things you can track using blockchain technologies today.
Blockchains are distributed, tamper-proof, public ledgers of transactions, brought to public attention by the cryptocurrency bitcoin, which is based on what is still the most widespread blockchain. But blockchains are being used for a whole lot more than making pseudonymous payments outside the traditional banking system.
Because blockchains are distributed, an industry or a marketplace can use them without the risk of a single point of failure. And because they can't be modified, there is no question of whether the record keeper can be trusted. Those factors have prompted a number of enterprises to build blockchains into essential business functions, or at least to test them there.
Here are five ways your business could use blockchain technology today.
Bitcoin introduced the first blockchain as a tool for making payments without going through the banks.
But what if you work for a bank? Strangely, many of the features that made bitcoin distasteful to the banks are making the underlying blockchain technology attractive as a way to settle transactions among themselves in dollars or sterling. It's public, so banks can see whether their counterparties can afford to settle their debts, and distributed, so they can settle faster than some central banks will allow.
Ripple is one of the first such blockchain-based settlement mechanisms: Its banking partners include UBS, Santander, and Standard Chartered. But UBS and Santander are also working on another blockchain project called Utility Settlement Coin, which will allow them to settle payments in multiple currencies, with Deutsche Bank, BNY Mellon, and others.
If these systems catch on, it's surely only a matter of time before such blockchain payments trickle down to compete with traditional inter-bank transfer mechanisms such as SWIFT.
Identity of Things
On the internet, famously, no one knows if you're a dog, and on the internet of things, identity can be similarly difficult to pin down.
That's not great if you're trying to securely identify the devices that connect to your network, and it's what prompted the U.S. Department of Homeland Security to fund a project by Factom to create a timestamped log of such devices in a blockchain, recording their identification number, manufacturer, available device updates, known security issues, and granted permissions.
That could all go in a regular device-management database, but the DHS hopes that the immutability of the blockchain will make it harder for hackers to spoof known devices by preventing them from altering the records.
It's not just devices that can be spoofed, but also qualifications.
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