Blockchain is a distributed network of computers, so called hubs. Each transaction between the hubs must comply with the blockchain protocol in question. Its strength lies in the fact that all transactions between different parties are dealt with individually, without the need to involve an intermediary, such as a bank, notary or government. As a result, two parties who do not know each other can still work together in a secure and reliable way.
The best-known example of blockchain is Bitcoin. But blockchain's potential goes much further than the virtual currency. Below, we shed light on some other interesting blockchain applications that are just starting out and will likely conquer the market in the next few years.
1. Land registry
In countries such as Sweden and Honduras, a proof of concept is underway for holding the registration of property such as land, houses, or even cars, in blockchain. As soon as a piece of land changes ownership, the transaction is stored irrevocably in the blockchain. This irreversibility is the major selling point of blockchain technology: each movement is traceable and auditable and hacking the blockchain is impossible, since even the slightest change in the chain immediately becomes visible to all hubs in the network. The potential advantages are clear: corruption and fraud are rendered impossible and the role of intermediaries such as notaries becomes superfluous.
Does this mean that the profession of notary will die out? No, because certainly in a transitional phase, the first block of a blockchain will potentially require checking by a trustworthy party (is the first owner of a piece of land really the owner?).
As privacy can sometimes be a delicate issue in the case of rights of ownership, the deeds of ownership should by definition be held within a 'permissioned blockchain'. Only the trusted parties defined above – owner, government, regulator, etc. – will then have access to the information in the chain.
2. Management of access rights
Another application for blockchain can be found in the area of managing access rights. During the CSCMP Blockchain for Transport & Logistics Conference, a proof of concept was presented for container handling in the Port of Antwerp.
A goods vehicle driver who collects containers is currently given a PIN number which gives them access to the terminal and the containers. It goes without saying that issuing the PIN number to the goods vehicle driver by email through a number of intermediaries is not fully secure.
The 'right to collect' that the PIN number represents is replaced in the POC by a token on a blockchain. The sender, for example, is the first one who has this right – they transfer it to a transportation company, who in turn pass it on to a subcontractor. At the end of the day, the 'right to collect' is with the goods vehicle driver, who goes to collect the container. All intermediate parties who ever had the 'right to collect' or right of access are therefore irrevocably recorded in the blockchain and cannot pass the right onto another party without this being visible in the blockchain.
Implementing this application is relatively simple, as everything is done online. As an alternative, there is no longer a need for adjustments to suit the container system in the first place as, based on the 'right of collection' in the blockchain at the entry to the terminal, a unique, time-limited PIN number is generated.
That blockchain applications will play a part in the future of port operations and international trade in general is clear from the number of start-ups such as blockfreight and wave.
3. Integrity of networks, applications and configuration files
The third application is another one that is being marketed on a large scale. Black Lantern, a tool offered by Guardtime, secures your network using blockchain technology.
One way to secure your organization against malicious intrusions is to take regular digital fingerprints ('hashes') of the relevant configuration and program files. Regular means ideally every second. The digital fingerprints are continuously compared with one another, and as soon as a fingerprint changes, it means that something has been amended in the relevant files and there is a potential problem.
Fingerprints that are stored in a classic reference file can, unfortunately, also be changed easily without anyone noticing a thing. However, if you store the fingerprints taken every second in a blockchain, a hacker cannot change the reference fingerprints without leaving footprints behind in the chain.
Black Lantern is a hardware device you can use to store this kind of fingerprint in a blockchain. In this way, it provides a real-time alarm that enables your organization to react far quicker to a potentially malicious incursion.
4. Coordination platform for IoT devices
Smart devices are on the rise and are making our lives much simpler, from the fridge that orders more milk and eggs, to the vacuum cleaner that buys its own bags, to the network of sensors in your windows that keeps the heat in and the cold out. Yet these devices are often not well secured and, despite this, have to communicate with each other and the outside world over your network. The sensor in the windows must exchange information with the sunblinds, and your Nest thermostat sends data through to Google. This means that anyone who hacks into these devices can abuse them in order to attack other systems (a Mirai botnet), or even to obtain other sensitive information being held on your home network.
Blockchain once again provides a solution to this. Using a platform where each device is registered in a blockchain, and only communicates with those living in the house, other devices and trusted providers in the outside world via this blockchain, no-one can force their way in without leaving footprints.
5. External business processes
Last but not least, another interesting blockchain application revolves around business processes across different organizations. Think, for example, of international trade, where all kinds of documents – such as a bill of lading, customs documents or credit requests (trade finance) – are required, pass through many different organizations and are filled in and added to by several people.
A classic business process engine supports the complex workflow behind this paperwork, but cannot fully guarantee that each PDF is also the latest – and duly completed – document. This security aspect is now frequently handled by having a trusted third party build a business process engine.
You can also register the complete workflow, with all its steps and statuses, in a blockchain. All parties fill out the necessary documents, independently of each other, and confirm then in the blockchain. Each change in status is recorded in the blockchain, and at the end of the workflow, a PDF is generated based on the statuses and information available. The blockchain can therefore be used easily to verify that the PDF is correct, has not been tampered with, and is also the final version.
We have seen that numerous parties are involved in most applications. It is precisely in situations such as these that blockchain is an appropriate solution, as with blockchain, it is possible to set up a trustworthy platform shared by different parties without having to use a 'trusted third party'. This is called 'disintermediation'.
Another term that is frequently mentioned in the above examples is 'irreversibility'. The main power of blockchain is that any action taken or change made is recorded and can never be undone – ever. Counterfeiting a blockchain would require an amount of computing power that simply does not exist. This makes blockchain a robust, reliable and secure technology which offers everything that is needed to become the standard in only a few years.
If you would like to find out more about blockchain, please contact our expert, Stefan Smeets, at Stefan.Smeets@realdolmen.com or Roel De Cuyper, Division Manager, The Connected Company at roel.decuyper@realdolmen.com.
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