Blockchain technology is still relatively new, and its potential applications in the business world are still being uncovered. Big tech players – including Amazon, Microsoft, and Google – are betting big on blockchain, already offering it as-a-service. Why? Aside from its potential to disrupt countless industries, blockchain’s distributed retention of encrypted data is at the heart of public cloud storage.
What is blockchain?
If the term ‘blockchain’ sounds familiar, there’s a good chance you’ve heard it mentioned in a Bitcoin context. If you haven’t heard about blockchain, Don & Alex Tapscott, authors of ‘Blockchain Revolution’ (2016), provide a good definition:
‘Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.’
There are two types of blockchain implementations: ‘trustless’ and ‘trusted’. A trustless example is Bitcoin where the blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralised version of this information exists for a hacker to corrupt. It is hosted by millions of computers simultaneously, and its data is accessible to anyone on the Internet. It is effectively a digital modern version of a traditional ledger run by a bank.
A trusted example is the monetary authority of Singapore (MAS) plan to trial blockchain as a method to settle inter-bank transfers. The implementation uses the same technologies and processes as the trustless based system, however, it is run on a private network and the ledger systems are effectively computers within that private network.
Blockchain technology, however, isn’t just limited to cryptocurrencies like Bitcoin. Its cryptographic method of distributing data and recording transactions lends itself to a virtually endless array of applications, from land titles, loans, trades, intellectual property, and identity verification, among other things.
Where does blockchain fit in with cloud?
For the blockchain revolution to happen quickly, it’s unlikely that every organisation will build its own infrastructure to support it. And there’s no need to thanks to the cloud.
While you don’t need a cloud environment to participate in a blockchain, cloud computing can make participation much easier than traditional, on-premises solutions. Cloud integration helps ensure a more consistent level of security and blockchain performance. Some providers including Amazon and Microsoft already offer ‘blockchain as-a-service’, with blockchain cloud configuration already set up.
- Access to blockchain-enabled applications and data are largely identity and role-based. The use of public cloud has become the proving ground for identity and access-based management approaches, such as those provided by Microsoft, Google, and AWS. These services are already native on these cloud providers – you don’t have to integrate them yourself.
- Public clouds allow you to allocate as many instances as you like – this elastic approach to scaling and de-scaling is ideal for blockchain transactions.
- Big cloud services providers typically handle redundancies by spreading files throughout regional data centres, making each data centre a point of failure. On a decentralised blockchain, data is stored on dozens of individual nodes intelligently dispersed across the globe.
- No third party controls user data or has access to user files. Each node only stores encrypted fragments of user data and users control their own keys.
Like with all new technology, you shouldn’t get caught up in the hype and implement new systems because everyone else is. For your business to get the most value, you need to have a strategy. If you answer these questions, the path to blockchain via the cloud should be relatively straightforward:
- What are the core systems and requirements that may benefit from blockchain within your organisation?
- What are the core business benefits that you’re seeking?
- What is the required ROI from blockchain?
- How would your current cloud strategy support new blockchain applications?
- How would your existing cloud end points connect with blockchain implementation and applications?
Blockchain technology has a large potential to transform business operating models in the long term, particularly when integrated with the public cloud. It’s still early days for blockchain, but it’s an emerging technology definitely worth keeping an eye on.