Industry experts believe blockchain is a technology that has the potential to affect the business of most IT professionals in the next five years. Pick an industry you feel will be most affected by bl

It is regarded by many industry watchers as a disrupting force in the financial world. A PwC global financial technology (fintech) survey found that 56% of respondents recognise the importance of blockchain . At the same time, however, 57% admit to being unsure about or unlikely to respond to this trend.

Start witH tHe HaSH Blockchain is effectively a shared ledger between a group of people for example, a group of companies that work together to produce a service or product. what makes blockchain differ - ent is the fact that the history of the changes past transactions, for example are immutable.

essentially, the historical entries become read-only and unchangeable. this is due to the fact that each blockchain entry relies on the hash a computed value including part of a previous block as part of its hashing calculation for the current block. this means that if a previous block is somehow modi - ed or corrupted, its hash value will change and therefore the values after that point become broken, making the tampering evident for all to see.

one example where blockchain technology can be used is where several companies come together to provide or consume B lockchain : hype vs reality Regarded by many as a disruptive force in finance and beyond, blockchain technology presents a number of complex challenges that must be overcome before it can truly deliver on its promises. Stuart Burns reports BUYER’S GUIDE TO BLOCKCHAIN TECHNOLOGY | PART 1 OF 3 Home IURIIMOTOV/ADOBE computerweekly .com 10-16 S eptember 2019 22 Home News HMRC under fire over ‘scaremongering’ IR35 letters targeting GSK contractors Ransomware has evolved into a serious enterprise threat How Defra has been preparing its IT systems for any Brexit eventuality Editor’s comment Buyer’s guide to blockchain Chasing down hackers through security analytics How councils are using technology to support adult social care Downtime services, usually under long-term contracts. It can be complex and cumbersome to manage contracts involving several individu - als, when multiple documents are involved and everyone needs to agree on the same contract versions and details. Over time, changes will occur that also need to be managed and agreed on.

Managing contracts in blockchain, however, means that rather than physical bits of paper being passed around, it becomes possi - ble to mathematically guarantee the contract documents are as intended and the appropriate (digital) sign- off is a part of the chain. That chain can be verified by any of the parties as required. This is a key part of the whole blockchain concept.

a n early trial in 2016, Barclays and wave com - pleted what they described as a world rs by using blockchain technology to handle the docu - mentation to approve a fund trans - action, which was made through the Society for worldwide interbank financial telecommunication ( Swift ). the letter of credit transaction between ornua (formerly the irish dairy Board) and Seychelles trading company used distributed ledger technology via the wave platform to enable all parties involved to see the documents they needed and transmit them where required on a decentralised network. this removed some of the inefciencies of traditional international trade and brought completion timescales down from weeks to a few hours. it is not hard to see how the use of blockchain could be extended to include many different types of information, eventually encom - passing the general public.

for instance, an article by mckinsey estimates that using block - chain to sign up new retail banking customers has the potential to create up to $1bn of savings in oper - ating costs globally and reduce reg - ulatory nes by between $2bn and $3bn. in addition, we expect block - chain solutions to reduce annual losses from fraud by $7bn to $9bn mckinsey stated.

m anagement cHallengeS However, setting up and managing blockchain is a complex process that requires skilled design. as gartner notes, a distributed ledger requires the recording and replicat - ing of data in a secure manner . this is a complex mechanism with signicant computational load (called mining). as such, blockchain has rather large scalability issues. verication of blocks can take several minutes, which makes blockchain inap - propriate for real-time transactions.

each blockchain consumer may need to verify an entire trans - action history, which is very inefcient and requires a high A distributed ledger requires the recording And replic Ating of dA tA in A secure m Anner . t his is A complex mech Anism with signific Ant comput Ation Al lo Ad . A s such , blockch Ain h As rA ther lA rge sc AlA bility issues BUYER’S GUIDE computerweekly .com 10-16 S eptember 2019 23 Home News HMRC under fire over ‘scaremongering’ IR35 letters targeting GSK contractors Ransomware has evolved into a serious enterprise threat How Defra has been preparing its IT systems for any Brexit eventuality Editor’s comment Buyer’s guide to blockchain Chasing down hackers through security analytics How councils are using technology to support adult social care Downtime computational workload. New platforms are being developed that explore alternative approaches to verifying the integrity of blockchain transactions. These include massively diverse public ledgers for verifying historic transactions.

Other ideas include having a random pool of machines that vali - date the blockchain and publicly announce the results of the vali - dation, saving everyone repeating the same compute-intensive functions. The very nature of these random machines and frequency with which they are rotated means that discovering and trying to attack verification hosts should be extremely difficult.

All current blockchain systems have some limitations in terms of scaling. So, such techniques may not scale to the level needed for blockchain to be a viable replacement to existing payment processing networks. However, there is now growing interest in new distributed processor workload platforms, such as Golam , and the use of hardware-based acceleration, application-specific BUYER’S GUIDE IURIIMOTOV/ADOBE A ll current blockchAin systems h Ave some limit Ations in terms of sc Aling computerweekly .com 10-16 S eptember 2019 24 Home News HMRC under fire over ‘scaremongering’ IR35 letters targeting GSK contractors Ransomware has evolved into a serious enterprise threat How Defra has been preparing its IT systems for any Brexit eventuality Editor’s comment Buyer’s guide to blockchain Chasing down hackers through security analytics How councils are using technology to support adult social care Downtime integrated circuits (Asics) and graphics processing units (GPUs), all of which aim to accelerate processing for blockchain.

Beyond BuSineSS contractS there are many uses for blockchain technology in nance and beyond , but currently most of these technologies, with the exception of cryptocurrencies, are aimed squarely at the busi - ness to business market (B2B). for blockchain to move beyond small-scale trials and experimenta - tion, the whole software and hard - ware infrastructure stack needs to scale to support larger and larger volumes of transactions.

in 2018, a kpmg paper looking at uses for blockchain described the challenges of integrating blockchain into existing, legacy processes. the paper warned that organisations need to be aware that their legacy systems may not be designed to interact with block - chain systems or capitalise on the advantages they offer.

comprehensive examination of interoperability and integra - tion is essential the kpmg paper stated. given the immuta - bility of transactions, it is essential that the proper mechanisms are in place to prevent incorrect data from being written onto the blockchain another area of concern is the privacy of nancial transactions . according to pwc, the business benets for many players, or even the industry, will not materialise if the trust issu is not addressed effectively. for pwc, the hurdles that lie ahead include understanding whether or not the public ledger can be hacked.

from a privacy perspective, if several different organisations are involved in a transaction that uses blockchain, not all group members should have access to the data held within the blockchain.

However, they still need to verify the blockchai s integrity. Such secrecy ies in the face of the classic block - chain ethos.

any transactions that go through Bitcoin or other cryptocurrencies are recorded as part of the block - chain process. information such as wallet transactions, ip address and other details are collected. Being able to trace all wallet transactions could allow any interested parties to infer not only spending patterns, but also socio-economic status and similar. it may not give away exactly what is being purchased, but this information can help build an overall picture of someon s online spending habits.

today, it is very much an exploration of what is possible. as with any technology, over time blockchain will become more rened and mature, and no doubt privacy capable and expandable as needed. n BUYER’S GUIDE t he business benefits of blockchAin will not m Ateri Alise if the trust issue is not Addressed effectively . h urdles include underst Anding whether or not the public ledger cA n be h Acked Copyright ofComputer Weeklyisthe property ofTechTarget, Inc.anditscontent maynotbe copied oremailed tomultiple sitesorposted toalistserv without thecopyright holder's express writtenpermission. However,usersmayprint, download, oremail articles for individual use.