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Blockchain – The logical next step in our (IT) evolution

By Karel Dekyvere, CISO, Microsoft on March 9, 2017

Filed under Telecommunications

Most people have heard about blockchain by now, and many wonder what all the fuzz is about. Others are desperately trying to figure out why some in the industry claim that its impact will be bigger than the invention of the Internet!

The simple answer is that information is the final frontier in evolution. Once mankind has reached this level, we will truly live in an information society. The biggest challenges that we face are ensuring that information is genuine, immutable, and can live a life of its own. While living in an era of alternative facts littered across our social channels, we’ve grown to understand the importance of information and how to best manage it. This is where blockchain comes into play.

Let’s start with charting the evolution of Information Technology (IT). It all started with connecting information, which was initially housed in huge mainframes, linked through dedicated terminals. Information management was simple, the perimeter of the big boxes needed to be controlled and defended, end of story. The world evolved and personal devices were introduced. Innovators like Bill Gates had a grand vision of a computer on every desk and in every home. Everything got connected. People soon realized that management and protection had to shift to the device level. The Defense in depth model was introduced.  This was further confirmed by the introduction of the Internet. High investments were done on top of the existing perimeter defense model to secure and manage all connected devices. In a recent trend, we are evolving even further: regardless of the network and devices, identities are becoming he next big thing. Identities are managed and interconnected via your personal services, social media, corporate accounts, and more. The world is all about you, the person.  We live in a heterogeneous personal landscape, where our phone is an Apple, our computer runs Windows, our smart TV runs Android. But our identity must span across all, and its information must be managed on all. Yet another new layer of complexity.

The ultimate dream is that information itself would be self-sustaining, regardless of the human working with it, the device it is stored on, and the network that it’s wired through. That eventual goal might indeed be closer than many of us think, and is certainly a lot less exotic than perceived. Let’s take a simple example and use this to explore how information will have a life on its own.

Imagine you are a fisherman. You are good at what you do, and you want your end-customers to have the best experience when enjoying your catch. Unfortunately, there are many steps between you and the fish ending up on someone’s plate.  You want to have quality assurance over every step.  Let’s start with adding a simple smart tag into the crates that transport your fish. The tag measures simple parameters such as temperature, humidity, and exposure to direct sunlight.  At preset intervals the tag will write these parameters into a small data block, mathematically chain it to the previous measurement, and share it with all other tags in its neighborhood. No rocket science, simple mathematical equations stored into a (small) distributed database. When a customer now receives your fish, it comes with an entire track record of freshness. It can even show who or where it failed to be compliant with the requirements (e.g. always store below 5°C), and it could even automatically discard the product when the (smart) contract is not fulfilled. All of that is done independent of the network, the devices, and the companies (identities) it got connected through.

Welcome to the beautiful world of blockchain. You can replace the fish in the above example with anything you’d like. It’s the smart contract behind it that counts. Imagine a model in which you gathered a fact, you tagged it, and it is now spreading around. When someone tries to alter the fact and make it an alternative fact, the contract gets broken, thus it’s no longer a trustworthy fact. Telecommunications companies are exploring the use of blockchain for securing and optimizing their transactions, particularly those involving external parties, for activities like charging or settlement. Other telcos and Global Systems Integrators are leveraging their close relationships with financial firms to provide them with ready-made blockchain services, like KPMG’s recently launched Digital Ledger Services. Your only limit is your imagination towards the number of scenarios you can build.

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