Blockchains are distributed digital ledgers of cryptographically signed transactions that are grouped into blocks. Each block is cryptographically linked to the previous one (making it tamper evident) after validation and undergoing a consensus decision. As new blocks are added, older blocks become more difficult to modify (creating tamper resistance). New blocks are replicated across copies of the ledger within the network, and any conflicts are resolved automatically using established rules. Since its launch, the blockchain technology has gone through ups and downs, but predictably, will gain momentum for rapid growth in the years to come.
Generally, blockchains are divided into public, consortium, and private blockchains, each applied in particular scenarios.
A public blockchain, with no official body of management or centralized server, allows nodes to freely join and exit the network. These nodes, when in operation, interoperate with each other in a flat topology and work based on the consensus mechanism. The public blockchain usually finds its application in cryptocurrency like Bitcoin, Ethereum, and EOS, which is also an area the blockchain technology was first adopted.
In a private blockchain network, the write access to each node is internally controlled, while the read access is selectively granted as required. Built on a universal architecture with support for multi-node running, a private blockchain is suitable for internal data management and audits within organizations.
Specific to an organization, the private blockchain system has rules defined that best suit the organization’s needs. We can look at the private blockchain as a robust, forensicable internal distributed system, which is an evolved edition of the organization’s internal system that has been decentralized.
A consortium blockchain sits on the fence between public and private blockchains. Each node corresponds to an entity, which can join and exit the network upon authorization. Different entities organize into a consortium of shared interests to jointly maintain the sound operation of the blockchain.
Typical examples of the consortium blockchain are Hyperledger, Quorum, and R3 Corda. Inheriting the feature of decentralization inherent in the blockchain, the consortium blockchain introduces centralized management of a limited degree to make the entire system more operable and widely applicable to financial, logistics, and energy sectors and other enterprise-grade scenarios.
According to multiple research institutes, 2020 will mark a turning point in the history of enterprise blockchain applications. In its prediction about top 10 technological trends, Alibaba DAMO Academy mentions that the technical threshold for enterprise blockchain applications in 2020 will be further lowered, various hardware chips built with core algorithms around the node, cloud, and chain for blockchains will emerge as the times demand, and blockchain applications with over 10 million daily active users (DAUs) will become a reality. In its Industrial Internet: A Look Back at 2019 and a Look into 2020 , Tencent Research Institute mentions 11 trends in the industrial transformation, for example, “2020: Blockchain applications, upon integration with industrial scenarios, are expected to be rolled out in large scale.”
Aside from these reports, cloud service providers (CSPs), such as Alibaba, Tencent, Amazon, and Microsoft, have also launched the Blockchain as a Service (BaaS), in a bid to help customers deploy blockchain applications cost-effectively and push the development of the entire blockchain industry. According to the forecast made by the International Data Corporation (IDC), as for the IT spending, Chinese companies will invest $2.7 billion in blockchain services (consulting, implementation, maintenance, support, and so on) by 2023, accounting for 29% of enterprise management service expenditures.
Gartner predicts that1, by 2022, more than a billion people will have some data about them referenced on a blockchain though they may not be aware of it, and by 2024, enterprises will use the blockchain licenses to secure 30% of their sensitive data. In the IDC FutureScape: Worldwide Blockchain 2020
Predictions – China Implications 2, the research institute predicts that, by 2023, 40% of China’s firsttier financial institutions will use blockchain networks for node-to-node processing of cross-border payments, bypassing SWIFT and central bank infrastructure, and by 2024, over 85% of China’s container shipments will be tracked using blockchains, half of which will employ blockchain-supported crossborder payments.
As blockchain applications and infrastructure for finance, logistics, identity authentication, and other sectors are mostly based on the consortium blockchain, the remaining part of this report will dwell upon the application of this type of blockchains in enterprise operations.
To be continued.
