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Blockchain is disrupting every industry

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 17 Nov 2016
Blockchain is fundamentally changing how we think, how we do business and how we live, says IBM's Maurice Blackwood.
Blockchain is fundamentally changing how we think, how we do business and how we live, says IBM's Maurice Blackwood.

Blockchain is fundamentally reshaping almost every industry. It is an open source movement that aims to reshape not only financial markets but other markets where there is an opportunity to have a distributed decentralised ledger within a network.

This was according to Maurice Blackwood, director of systems hardware at IBM SA, speaking at the IBM Unleash the Heart of Your Enterprise Executive Forum held in partnership with ITWeb in Johannesburg this week.

Blackwood explained that through the use of Blockchain, financial institutions can settle securities in minutes, instead of days. Manufacturers can reduce product recalls by sharing production logs with original equipment manufacturers and regulators and businesses of all types can more closely manage the flow of goods and related payments with greater speed and less risk.

He unpacked the four drivers of financial costs: the cost of search, the cost of collaborating, the cost of contracting and the cost of trust. Blackwood believes if an organisation can drive down the cost in any of these areas, consumers will shift their focus.

"Blockchain is reshaping how organisations are looking at costs. By driving down these costs and ensuring trust, an organisation can shift away from transactions being done in an enterprise-to- enterprise structure.

"Technology is driving costs outside of institutions to individuals and markets out there, and blockchain is enabling that, only in a faster and more secured shared manner. We are moving from the times when everything was about scalability, reliability, serviceability, to it being about consensus and immutability," he noted.

In the music industry, he continued, some record labels make money off record contracts and when musicians load their music on Apple they make about 30% per track. Blockchain is allowing individuals to release their music on a chain and anyone in the world can go out and buy it.

According to IBM, the company's blockchain has joined the hyper ledger project to evolve and improve on earlier forms of blockchain, instead of having a blockchain that is reliant on the exchange of cryptocurrencies with anonymous users on a public network (e.g. Bitcoin). The company believes a blockchain for business provides a permissioned network, with known identities, without the need for cryptocurrencies.

"Blockchain is fundamentally changing how we think, how we do business and how we live, elaborated Blackwood. Market movers will take blockchain to the next level. These are people who are going to be innovative individuals who are not afraid of technology but embrace it.

"Another group of people who will take advantage of the next era of cognitive computing are regulators who will start looking at ways to make sure that the financial transactions are secure, and drive a level of efficiency. Most of what we do is underpinned by data: how we move that data, how we connect data, how we make sense of data, and blockchain is helping those processes because at the end of the day we are creating digital and physical assets, moving them around and we must run them on the most secure platform," Blackwood asserted.

"In the next five years we will see markets remade and remoulded and we believe this will be done on blockchain technology. As we move into the next era of cognitive computing, we need to make sure that the technology on which we are running is safe and secure," he concluded.

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