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It's safe to say that blockchain is on the verge of redefining traditional business models, changing paradigms around data security, accountability, and transparency. In fact, the potential to reshape a global organization's relationship with data is so immense that Gartner predicts blockchain’s business value will grow to slightly more than $176 billion by 2025, with projections to exceed $3.1 trillion by 2030.
Blockchain's status as a “disruptor” is attributed to an entirely new concept around logging and authenticating data. At its core, this technology offers a digital method of making, recording, and validating events or transactions. Each block is a record of new transactions and data types, including currency, digital rights, intellectual property, identity, and property titles, among other things, which are added to the chain. Like a page on a ledger, each block includes a record of the previous transaction recorded in chronological order, providing a sequential trail of all transactions. However, the ledger doesn’t exist in one place. Instead, copies are held and are simultaneously updated with each participating node in the ecosystem. Thus, it can be distributed across numerous participants throughout the network, with the ability to remain private or anonymous, depending on how the technology is implemented.
The implications of blockchain are vast for organizations across all industries, ranging from healthcare and finance to manufacturing, retail, and bio-sciences. Among other things, the technology allows industries to redefine or create new business models by eliminating intermediaries. Because blockchains are immutable, transparent, and highly secure, they also have the potential to significantly reduce fraud. In addition, blockchain will accelerate efficiency and speed, since organizations won't have to wait for verification through these intermediaries. As a result, the technology has the potential to significantly increase revenue and savings.
Blockchain is sure to offer all industries one thing—the ability to better manage their information
According to a study by UK-based research firm Juniper Research, nearly six in 10 of the world's largest corporations—57%—are either actively considering or in the process of deploying blockchain. Two-thirds of companies surveyed said that they expect to integrate blockchain into their systems by the end of 2018.
For example, Swedish Mapping Authority is already leaping ahead of the anticipated global curve by leveraging blockchains to record and automate property transactions, eliminating the need for physical archives of their contracts. The agency estimates that it will save Swedish tax payers over 100 million euro annually.
While the drivers for adopting blockchain may vary, the technology is sure to offer all industries one thing—the ability to better manage their information. The following are two of the most relevant examples currently being implemented that will serve to transform information management for enterprises.
Preserving the Integrity of Log DataMost information management systems sufficiently log all the key events in the repository. That said, most, if not all, of those audit logs can be corrupted. Despite millions of dollars spent on data protection mechanisms, it is relatively easy for administrators or malicious parties to copy, delete, modify, or falsify a company’s log data. For example, a security incident could remove or compromise log records in order to cover up the tracks of unauthorized users. Conversely, organizations also might struggle proving to third-party companies, auditors, or courts that their log records were created at the time stated and not recently fabricated.
When customers look at their management system for log entries—often accessible to a wide variety of users—they need to be able to trust that the data is pure and that the log is uncompromised. Yet, outsiders and employees alike have the ability to destroy the integrity of an organization’s data history, whether intentionally or by accident. Consequently, the inherent vulnerability of data makes it difficult for organizations to make solid business decisions around it while also creating additional challenges when proving compliance to government or industry regulations.
Applied to this scenario, blockchain provides a trusted, independent, and cost-efficient proof-mechanism that ensures that log entries can’t be deleted or altered after the fact. For example, the Walmart Corporation is planning to leverage blockchain technology to help improve and ensure food safety standards throughout their entire global organization. Blockchain’s distributed ledgers are increasingly being used to ensure both the integrity of the process and the legitimacy of log data involved in all transactions—everything from tracking inventory to confirming payments to verifying that all tasks were conducted thoroughly and accurately along the way.
Two-thirds of companies surveyed said that they expect to integrate blockchain into their systems by the end of 2018.
Cost-Effective Alternative to Digital SignaturesDigital signatures are based on two or more groups that sign documents or other data, requiring a trusted third-party to issue signing certificates to verify that the signatures of all signing parties are authentic and that the signed data has not been altered. Providing a crucial security control in many organizations, digital signatures leverage certificates and complex mathematical algorithms to verify the legitimacy of data as well as protection against forgery when authenticating documents across email and other systems.
However, they come with a few downsides. Anyone who relies on digital signatures for authentication on a regular basis is familiar with the difficulty and cost of acquiring trusted certificates, the signing and safekeeping of those certificates, the uncertainty around whether a third party is truly impartial, and the difficulties in agreeing upon a provider that everyone can trust.
The advantage of blockchain is that it can provide proof of data integrity without the need for a third party as a go-between. Blockchain essentially builds out the business ledger by allowing multiple signatures, the creation of fingerprints and/or timestamps as an authenticator, and the distribution of information across multiple systems in a network as opposed to one centralized server.
With digital signatures and similar authentication needs, blockchain’s greatest value is in its ability to provide “proof-of-work”—transactions that cannot be edited or removed—integral in both securing and authenticating transactions with signature technologies.
The Future of BlockchainBlockchain’s real-world applications to ensure data integrity are boundless, ranging from maintaining compliance standards to ensuring profitability to tracking data that could save human lives. While blockchain is still experiencing popularity attributed to its hype, it’s no secret that the technology stands to revolutionize information management processes as we know them. If anything, blockchain will perhaps be most valuable when the business process crosses trust boundaries, requiring organizations to grant multiple parties access to the same data and the ability to manipulate it. That value will be further realized if transactions involve third parties controlling the data as a single source of truth or when business processes involve manual verification steps.
Blockchain has already begun to transform the way organizations and whole industries perceive and relate to information. While it’s nearly impossible to conceive of every future scenario, we’re likely only at the cusp of realizing the enormous information management benefits that blockchain will bring down the road.
Mika Javanainen is Vice President of Product Marketing at M-Files Corporation. Prior to his executive roles, he worked as a systems specialist, where he integrated document management systems with ERP and CRM applications. Follow Mika @mikajava or visit www.m-files.com.