The impact of blockchain: From Coronavirus and business applications to data security
Blockchain began in 2009. Most people have heard of Bitcoin. Blockchain is actually the key underlying technology of Bitcoin. It is a way to have "blocks" of encrypted data "chained" to each other in a robust way to ensure the data cannot be altered, once its transaction has been recorded. It uses sophisticated mathematics to achieve this. In addition to a robust data storage mechanism, distributed ownership is the other powerful benefit of Blockchain technology. Nobody can monopolize the Blockchain, and all participants play a role in ownership and authentication of transactions. All records are traceable yet irrevocable. This creates trust among parties, very quickly and efficiently, and is crucial for a scalable, robust economy. Blockchain under the Pandemic Situation Daniel Kwong, Chief Information and Innovation Officer at CITIC Telecom CPC said, "As for real world usage today, I think the best example is with the current pandemic situation. In general, COVID-19 has been a tremendous driver for accelerating the digital transformation of organizations, away from physical workflows toward virtual presences, virtual interactions. We are seeing massive increases in use of our virtual applications, such as for video conferencing, remote access, virtual desktops, data warehousing. Our customers have already been using these remote and virtual applications, but now we are seeing a major surge." China, for example, launched twenty Blockchain projects to cope with COVID-19, including for infection tracing, medical materials tracking, donation tracking, and insurance claims. Blockchain enabled all these to be rapidly implemented, within days. "Shandong University was able to deliver a rapid rollout of a pandemic data collection and monitoring system, in just two days," said Kwong. This was a system for the real-time online collection of the health status, hometown information of students and faculty members. It is used for monitoring the outbreak status in the university. Access levels to the data depended on varying levels of authority to ensure data integrity. Kwong added, "Compared to a traditional database system, the Blockchain approach makes the data and transactional record very robust against tampering. Once a student or faculty submits the health information, it cannot be tampered with. This is crucial for management during health crisis." Additionally, China launched a nationwide health tracking system for some 1.4 billion people! This system provides a color-coded health status, similar as traffic lights signal, for the whole population, with different colors indicating the health status of individuals on their smartphones. If this was to be implemented with a traditional database system, not only would it take a much longer time to develop, it will also require huge processing power for a centralized database. Plus, it would be challenging to scale and ensure security and data integrity. It might need weeks or months to be completed. But with Blockchain, China did it in just a few days! Blockchain offers Tremendous Benefits Aside from rapid deployment, Blockchain offers four key benefits to supply chains: Extremely high transparency, security, efficiency, and trust. Many people think of a Blockchain as a database but it's more of a ledger. The data is enclosed in the ledger but the secure ledger is the crucial new technology. Besides supply chain, medical and insurance claims are also benefitting from Blockchain. "Insurance processes often involve a lot of documentation from multiple parties, and with medical insurance it even involves doctors and hospitals. Blockchain not only accelerates the whole transaction process, from insurance purchase to claims, but also removes face-to-face contacts, and physical paperwork. This eliminates a lot of infection risk. It also makes transactions traceable and authenticated. The whole process is much faster, more efficient, safer, and robust, even conducted from just a mobile phone," Kwong explained. In addition to the COVID-19 use-cases, Blockchain applications have also been rolling out in various industries. For example, in retail, Blockchains are helping with customer loyalty programs. Other Uses Cases Most airline loyalty programs have a single data source, with numerous members and transactions. This loyalty program involves multiple airlines, and the customers of those airlines, all with different promotions and policies. So it's a very complicated program with many stakeholders and transactions. Blockchain brings incredible efficiency and security to such a system, solving many problems and simplifying the whole workflow, in addition to providing very strong security against hackers and transaction fraud. Kwong added, "Interestingly, traditional unused loyalty credits are recorded on the issuing platform's balance sheet as a financial liability and deferred revenue. But under the Blockchain mechanism, they are not recorded, and are considered shared liability across multiple parties. So there are business advantages other than technological aspects." In recent years, Blockchain technology has undergone a lot of standardization, and now there are ready-to-use APIs and programming libraries, modules, and even applications, that can be quickly purposed for specific business needs. "So I would say it's easier than ever to implement Blockchain applications," said Kwong. Enterprises generally can build their operations on Blockchain over existing systems such as ERP, CRM, e-commerce, customer service, technical support, finance, office applications, leave applications, payroll. All these can be built upon a General Purpose Blockchain API platform, using the same generic libraries to start quickly keeping track of data transactions. Key Things to Consider when Implementing Blockchain While a company is considering implementing Blockchain technology, the first thing to consider will be, who is going to do the design and implementation? "Traditionally, you would find a system integrator to do this. Or you might develop it in-house. But do your existing staff, or your chosen system integrator, have the necessary skills?" Kwong questioned. "You also need to consider what additional value your new Blockchain application can create. We already talked about a better balance sheet regarding loyalty programs, and visibility into Accounts Receivables. But do you have existing policies, or stakeholders, that are restricting the possibilities of your new Blockchain system? Perhaps those policies are obsolete, designed for less secure, slower, inefficient systems?" Privacy is another thing to consider, especially when data cannot be altered or deleted. Companies should make sure they have the right procedures to ensure data put into the Blockchain system is what they want. "You also need to think about the infrastructure to support the new Blockchain application," Kwong emphasized. "The system will be distributed across many nodes, so you must be mindful of network latency. Also consider network stability and security, system and data loading capacity, and especially technical loopholes when programming Smart Contracts. Additionally, decide how you will monitor the ongoing process and make fixes or improvements over the coming weeks, months, years. Do you have the right technical skills to do so, and how will you get feedback and consensus among distributed stakeholders?" How CITIC Telecom CPC helps with Blockchain Deployment CITIC Telecom CPC has been supporting its customers' Blockchain deployments with its flagship portfolio of cloud computing, enterprise networking, security and data warehousing solutions. "Our SmartCLOUD computing platform obviously can run Blockchain and Smart Contracts processes, and our other solutions help ensure high performance and reliability. In fact, our TrustCSI managed security service helps protect Blockchain applications. Don't forget, access to the Blockchain must be secure. While the Blockchain itself is tamper-proof, anyone with access can add unauthorized data to the Blockchain, which is irrevocable. That can be a nuisance, or a major privacy and confidentiality problem. We have sophisticated security mechanisms to help prevent that," Kwong said. The future of Blockchain is clear. There is a lot of activity going on to standardize Blockchain in the legal and regulatory fields. Eventually Blockchain will become a very widely used ICT foundation for many areas of society.