The following is the seventh in a series of conversations about digital innovation and the intelligent technologies powering the Intelligent Enterprise, with Jeff Janiszewski and Ginger Shimp from SAP North America Marketing. In this blog, they discuss how blockchain can be used for much more than cryptocurrency.
Ginger Shimp: So far, we’ve discussed how IoT captures Big Data, and how analytics puts that data to use. We’ve also talked about a few specific types of analytics, including data intelligence and machine learning (which also includes deep learning and artificial intelligence). Now we need to talk about one more part of analytics ― blockchain.
Jeff Janiszewski: I think some people would be surprised to learn that blockchain can be used for analytics. Actually, there’s a lot of confusion ― and conspiracy theories ― about what blockchain is. The idea that it was created for trading cryptocurrencies captures people’s imagination. After all, it works entirely in code and was created to circumvent the financial establishment. It wouldn’t be hard to believe this is the work of the new world order.
GS: Absolutely. As I understand it, the Illuminati funded the development of blockchain. In fact, after Leonardo da Vinci buried the Holy Grail at the Louvre, he traveled through time with his Illuminati friends to write the original code for blockchain ― only he wrote it backwards with his left hand so it would be more mysterious.
JJ: Of course. The full explanation is right there in our “Searching for Salaì” podcast. It explains exactly how blockchain enables time travel.
GS: The truth is out there! But just so people don’t have to go searching for it, perhaps we can explain how blockchain really works.
JJ: Sure. Blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. It’s important to note, however, that while all blockchains are distributed ledgers, not all distributed ledgers use blockchain.
GS: So think of any kind of old-fashioned ledger—it could be used for bookkeeping, or as a ship’s log, a hotel register, cemetery records, whatever. It might track anything, but here’s the important part: No one never erased anything from those old ledgers. They just kept turning the pages and adding new stuff. It was completely non-destructive. You could then make photocopies of it and hand it around to a lot of people. Then if anyone ever tried to change something, there would be proof that it happened.
JJ: However, keeping and distributing a ledger the old-fashioned way was very time-consuming and inefficient. It simply wouldn’t work in our fast-paced world. In the virtual world, things get deleted and changed all the time, and you don’t need bottles of white-out.
GS: So, the challenge is to create a virtual ledger that can be distributed but not tampered with or changed.
JJ: This is where blockchain comes in. When you create the ledger, you take batches of data and form “blocks.” Each block has an identifier called a “hash” that’s kind of like an address or time stamp. Then all the blocks are chained together in chronological sequence. The blocks have this exceedingly complex encryption on them, so they can never be changed or removed from the chain. Then copies of the chains are stored throughout a network so a lot of people have possession of them. New blocks can only be added to the chain by a verified consensus of the computers on the network. The strong encryption, the verification, and the lack of any controlling authority makes it totally secure.
GS: So, the utility of blockchain should be pretty obvious for industries like finance, law, government, and academia., But there are some other less obvious uses.
JJ: Yes! I was thinking of that when I was doing laundry yesterday. You know how you’re always losing socks in the laundry? If you had a smart washing machine and RFID tags on all your socks, you could create an unalterable blockchain ledger that would keep track of where your socks are at any given moment. No more missing socks!
GS: Seriously? You’ve just completely undermined our credibility on this topic by talking about missing socks. Nonetheless, as much as it pains me to admit it, you do have a point. Suppose a shipment of raw materials is moving from a warehouse to a factory, and the terms of the contract call for the shipment to be paid on delivery. If the raw materials are all tagged, and there’s an RFID sensor at the loading dock door ― just like your socks going into the washing machine ― blockchain would allow the payment to be verifiably made the instant the raw materials reach the factory.
JJ: Many companies are still working in silos. So once the raw materials arrive, they have to be logged in by someone on the loading dock and then that information has to be relayed to accounts payable, who has to log it in their database as well in order to trigger payment. Even if you pay electronically, something like that can take weeks. And because of the human intervention, mistakes can occur.
GS: So blockchain is far more than cryptocurrency. When you think about it, keeping ongoing records is a central function of every business. They keep track of how an organization operates both internally and externally. They’re also critical for managing physical and digital assets, recording internal transactions, verifying identities, and planning for the future. When blockchain is teamed with the other intelligent technologies, it can guarantee that the transfer of data happens seamlessly and securely in real time across an enterprise, as well as externally with partners.
JJ: It can be a major competitive advantage for those who adopt the technology early. I’m convinced that blockchain will become the standard way of doing business. (Who wants to needlessly wait two weeks to get paid when they can be paid immediately?) So, companies that embrace the efficiency and security and accountability of blockchain will become the preferred partners, and the sooner they make the transition, the faster they’ll see benefits.
GS: I couldn’t agree more. But you do realize that the Illuminati are behind the whole missing socks thing, don’t you? They use them in rituals at the summer solstice. Not kidding. I read it on the Internet, so it must be true.
To learn more about SAP Leonardo and blockchain, visit https://sapinnovate.me/leonardo/.
For a more imaginative experience of how technology has become integrated into our lives, listen to our cool new podcast, Searching for Salaì.
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Continue the experience at www.searchingforsalai.com.