While blockchain technology tends to get the most attention for its role in underpinning cryptocurrencies such as Bitcoin and Ether, vertical industries are quickly adopting it for its efficiency and transparency.
The electronic, distributed ledger technology has the potential to eliminate huge amounts of record-keeping and disrupt IT in ways not seen since the internet arrived, according to some experts.
Banking and financial services were the first to embrace blockchain ledgers as their core business functions are ideally suited to its distributed nature, transparency and immutability as a system of record.
In addition to efficiencies, banking and financial services rely on established trust between transaction participants, a time-consuming and high-friction process due to regulatory constraints, compliance and fraud risks and the sheer number of intermediaries involved.
"Consequently, for these processes, significant business benefits can be achieved with relatively simple, non-disruptive blockchain implementations," Everest Group Research wrote in a recent report: "Unblocking Blockchain Adoption – a Prioritization Framework for Business Processes."
Along with financial services, blockchain has made inroads as a transparent ledger for international shipping and as a method for tracking supply chains. And it is seen by some as the foundation for a new trust economy, where enterprises increasingly turn to blockchain to establish the identities of those with whom they do business.
"One could envision a future in which the impact of blockchain could rival that of the internet or the mobile revolution," Everest Group Research wrote in its report.
Widespread adoption and integration of blockchain technology in the enterprise isn't just on the horizon – it's possible now, offers big benefits to business, according to consultancy Deloitte LLP, and is rapidly moving into mission-critical scenarios.
"You can go industry by industry and you're seeing concepts proven, pilots now moving into production," said Deloitte CTO Bill Briggs. "Things like supply chain validation, food safety verification, consumer products companies and potentially industrial and even life sciences companies are starting to circle it.
"The government and public sector within the U.S. and, perhaps even more internationally, are trying to rethink everything from electronic voting and absentee ballots using blockchain to track the movement of the ballots – even if the vote itself isn't on a blockchain," Briggs said.
Here are three places where blockchain is already being rolled out or tested.
1. Blockchain for real estate
Sandy Krueger, CEO of Staten Island Multiple Listing Service, rolled out a blockchain proof of concept for his company's real estate listing site three months ago to address transparency and the inefficiencies inherent in traditional property deals.
The blockchain, powered by ShelterZoom's online platform, allows sellers, buyers and their realtor representatives to see all offers and transactions at the same time in real time.
"It makes the transaction more transparent in the sense that I, as the seller, know there's an offer coming in so I can call my realtor and say, "What's going on with this offer?" Krueger said, "rather than being left in the dark and waiting for someone to call me and tell me something's going on."
Cyrus Charter of New York
Cyrus Charter of New York was the first realty company to deploy ShelterZoom's blockchain platform to enable real estate transactions to take place in real time, while remaining transparent to all the parties involved in the deal.
Real estate transactions involve numerous parties from multiple offers to an acceptance, and in many instances those dealings continue to be paper-based, according to Krueger.
With that in mind, Krueger said he and his technology director were attracted to blockchain because they believe it will be the future of transactional business.
"You can't help but hear about blockchain now, with bitcoin and cryptocurrency and everything else that's out there," said Richard Mohr, the company's technology director.
Blockchain's use in "smart contracts," which – based on certain rules – automatically execute a transaction once parties have agreed on its conditions, also solves the confirmation and verification process, Mohr said. "[That's] something that really interested us and fits right in to that offer process because there are so many parties involved.
"Those offers can go back and forth with counter offers and revised offers and that smart contract ability really keeps all the parties up to date," he said.
Another attractive aspect of ShelterZoom's blockchain platform, Mohr said, is its compliance with Real Estate Standards Organization (RESO) data dictionary, which streamlined its integration with their current system.
Rolling out the platform, Mohr said, was simple in that it only required adopting a set of APIs on the company's online listing website. Potential buyers simply click on a widget that reads "Offer Now," and they're added to the blockchain ledger for that property.
"Blockchain allows us to really look to the future where there'll be an electronic hand off..., where everybody's protected and nobody has to be concerned about any security issues," Krueger said. "So we like the fact that this is really looking forward rather than just building on an existing system."
Currently, the Staten Island Multiple Listing Service only has one of its realtors using the ledger, but the property company's plan is to place a blockchain-based icon on every listing as a way for people to make offers.
ShelterZoom's first customer, Cyrus Charter of New York, is in full production mode as part of the initial testing phase, which began in November.
Live in the U.S., New York-based ShelterZoom's blockchain platform is expected to be online in Canada, Australia, Europe and countries in the Middle East in the first quarter of 2018.
ShelterZoom's second platform, Rent NOW, is currently in beta.
2. Blockchain delivers decentralized security for industrial IoT systems
Global wireless network technology provider ABB Wireless adopted blockchain as a method for delivering decentralized security services for industrial systems in industries such as utilities, oil and gas, and transportation.
Cybersecurity for IoT is becoming more relevant as industries transition into the age of "smart" systems, which use tiny electronic devices to communicate with, and control, everything from building HVACs to international cargo shipments.
ABB Wireless is using a blockchain platform developed by Xage, a startup that officially launched earlier this month.
ABB Wireless
A wireless gateway at an oil plant, which is typical of the type of node on which ABB Wireless has deployed a secure, blockchain-enabled mesh network.
ABB Wireless used Xage's security application running on edge gateways within a number of components at power utility substations. The mesh network enables secure, remote access to IoT devices to control substations, allowing for everything from viewing maintenance data to rerouting power.
The blockchain app contains an encrypted and immutable table of security credentials, which allows field workers to log into a device – even if the substation is disconnected from a utilities' central data center due to an accident, such as a wildfire.
"Everyone's scared to death that someone is going to get control of the grid," said Paul Gordon, vice president of engineering and operations at ABB Wireless. "This provides a solution in a scalable way, so security doesn't become a huge burden. It allows for a more scalable solution while meeting needs of highly secured environment."
Combining the immutability of a blockchain distributed ledger with encryption means that the more end nodes that are added, the more secure the network becomes, unlike traditional relational database systems that have a single point of access. Blockchain on IoT devices are more secure because a cyberattacker would need to break into a majority of the nodes to gain controllable access to a system.
On a system with thousands or tens of thousnds of IoT nodes, the possibility of hacking the network is remote at best.
"If you add a million more smart meters to a wireless network, you've just made that network harder to hack. Whereas in a traditional network, the more units you add, the more exposure there is to hacking," said Xage CEO Duncan Greatwood.
What Xage is delivering, according to Roman Arutyunov, co-founder and vice president of products, is the ability for smart meters to talk to each other securely. That allows a utility to detect an outage in a neighborhood and communicate with a local substation to reroute power or deliver more power if there's a surge in usage, Arutyunov said.
"This is about highly distributed, any-to-any communications between meters and substations.... You can fix a problem even before its perceptible to customers. And, the only way you can allow that to happen at all is if you've built a very strong security," Artyunov said.
Greatwood said Xage's blockchain platform can be used for securing any type of smart technology, from smart buildings to robotics to traffic systems that are increasingly able to communicate with semi- or fully-autonomous vehicles.
Xage is currently working with one of the nation's largest building management companies, which Greatwood declined to name, to roll out the blockchain security tech to hundreds of thousands of IoT controllers on fire and safety, HVAC and elevator systems. ABB Wireless' network has been tested with California utilities, which are currently concerned with losing connectivity due to the rampaging wildfires.
"Many utilities are very conscious of these issues and how this technology can help them," Gordon added.
While still in the trial stage – ABB Wireless has only deployed a few dozen blockchain-enabled wireless communication gateways for utilities – the company expects over the next three years to deploy the devices to tens of thousands of IoT nodes for utility customers as well as for use on gas and oil heads, which must be monitored, controlled and secured remotely.
ABB, Gordon said, also performed independent testing of the blockchain-enabled IoT network, and worked with Xage and utility customers to validate the security. In addition, the company overspec'd the nodes with processors that exceed 1GHz with several gigabytes of data storage capacity to future-proof them as the network inevitably grows.
"We're very excited about our whole distributed network," Gordon said.
3. Blockchain for data integration
Dell Boomi, a software-as-a-service (SaaS) integration company, is currently beta testing blockchain as a method for securing data being exchanged between disparate cloud services.
Boomi, purchased by Dell in 2010, enables companies using SaaS applications such as Salesforce.com or NetSuite to perform business data interchange between those applications or databases – either on premise or between firewalls.
As more companies adopt an almost exclusively cloud-centric application strategy, data increasingly must be exchanged between those SaaS platforms, according to Dell Boomi CTO Michael Morton.
A Boomi customer logs into Boomi.com from a browser and simply drops "connector" icons [called Atoms] onto a pallet, which can be used execute the integration between databases, file systems or CRM applications, Morton said.
Boomi connector icons are used to integrate between network protocols, such as HTTP, JMS, MQTT, JBC, FTP, and business CRM or ERP applications.
"We anticipate some of the major vendors we're partnered with, such as Salesforce and NetSuite, will figure out what blockchain means for CRM and ERP eventually," Morton said. "Ultimately, they're going to want to do data integration between any number of sources and also start interacting between blockchains and probably between smart contracts.
"We as an integration product are in the middle of being a hub that talks...between multiple blockchains," Morton said.
Morton and his team have only just begun to study how blockchain's many iterations, such as Hyperledger, Ethereum, R3 and Chain Core can interact with applications.
"If we look at the Hyperledger fabric, there are actual interfaces," Morton said. "There is 'Query,' which is seeking information from a blockchain; I can 'Invoke,' which is being able to stimulate a smart contract to be executed within a blockchain. Over time, it will be natural that you will actually be interacting with any number of cloud or on-premise applications, but also interacting with and calling up blockchains, permissioned or public.
"We just anticipate that at some point we should be building blockchain connectors that allow customers using Boomi to interact with blockchains as anybody developing an application client would," he added.
For example, Morton said, Dell is a major internal user of Saleforce, which contains not only private customer or transactional data, data that could be shared on a blockchain or as part of a smart contract that automatically executes to exchange data with other applications.
So Boomi's integration engine could read information out of Salesforce and invoke a smart contract through a blockchain to pass information between different iterations of Salesforce or other CRM or ERP applications.
"Given that I'm a CTO of a cloud-integration company, it behooves me to begin understanding the technology," Morton said. "At some point, I'd like to think it'll be a revenue generation opportunity for Dell Boomi because we're all about integration."
While Dell Boomi, Staten Island Multiple Listing Service and ABB Wireless are among the technology providers and enterprises exploring the potential for blockchain to create greater efficiency and transparency, Everest Group Research says they – and blockchain itself – are only at the threshold of a potential business revolution.
