Tech that Propels the Future of Service – Blockchain: The New Operating System for Trust

When E. Coli was discovered in romaine lettuce this spring, grocers across the country pulled the greens from their shelves and consumers were warned not to eat any they had purchased. Since food borne illness does not wait for business processes to confirm the exact source and culprit, retailers were forced to pull all produce that was potentially tainted and they, along with consumers, discarded any and all of what they had.

With IBM Food Trust, many across the food ecosystem are looking to change this process to be more precise in identifying the source and trace back to quickly prevent illness and economic impact.

For example, with IBM Food Trust, Walmart has cut the time it needs to identify the source of certain products from seven days to 2.2 seconds. The innovation that has enabled this to happen is an electronic distributed ledger that can deliver the answer to a query into its value chain virtually instantly. The capability that makes this possible: a permissioned blockchain network.

Jason Kelley, general manager, IBM Blockchain Services, was one of the mainstage speakers at the Center for Services Leadership recent Compete Through Service Symposium in Scottsdale, Arizona.

Public blockchains found fame as the technology that made crypto currencies possible, but when permissions are added, blockchains have broad implications for business. In fact, blockchain has created “a whole new playing field,” Kelley said, for value chains across industries. And he says, the task is much larger than any one business can manage alone. It will take a new kind of collaboration between departments and disciplines, industries and organizations, countries and cultures.

With hundreds of client projects and dozens of active networks today, IBM Blockchain is helping enterprises, start-ups and developers begin their journey with blockchain to unlock business value, gain unprecedented transparency and operate with newfound trust in financial services, healthcare, government, food safety, supply chains and many other industries.

Kelley believes we’re entering a new era where truth isn’t subjective, but collective, where radical transparency is uprooting how we interact, transact, and grow. We’re finally able to solve problems we thought were just the cost of business. Behind it all is blockchain: an open system that is creating shared certainty, advancing knowledge, and bringing coalitions together around a single view of truth.

What is blockchain?

Permissioned blockchains use technology to create shared, digital ledgers that provide secure, shared access to transactions and data throughout the value chain, for those that provide, or gain, value from access to that data.

Why is this so key?  Business transactions take place every second of every day: orders, payments, account tracking and much more. Often, each participant has his or her own ledger, so a version of the truth that may differ from other participants.

Ordinary transactions are complex. Each participant has his own, separate ledger, increasing the possibility of human error or fraud and reliance on intermediaries for validation creates inefficiencies. This can become a paper-laden process, resulting in frequent delays and potential losses for all stakeholders. These multiple ledgers can be a recipe for error, fraud and inefficiency. Because members on a blockchain share a common view of the truth, it’s now possible to see all details of a transaction end-to-end, reducing those vulnerabilities.

Blockchain provides a way to capture all of the data about a transaction, at every step along the way. This includes documents such as contracts, invoices, reports, etc., but also images and other pieces of information. Once recorded, the data is preserved just as it was entered, with full context regarding that data: who, when, where, etc.

Consider the piles of documents that must be prepared and signed when refinancing a mortgage. Paper copies are cumbersome, and the possibility of errors as documents are reproduced and distributed is relatively high. And, as those documents change hands, security, accuracy and timely processes are a concern.

Blockchain reduces complexity since it is a single, shared, tamper-evident ledger: once recorded, transactions cannot be altered.  All parties must give consensus before a new transaction is added to the network — eliminating or reducing paper processes, speeding up transaction times and increasing efficiencies

Blockchains are also highly resistant to hacking. That’s because the data is bundled into packages called blocks that are linked together. In order to manipulate a block, a hacker would have to work through all of the blocks up and downstream from the target. Impossible? Maybe not — but very, very difficult.

Blockchain benefits are critical to enterprises, according to Kelley because: 1. It’s distributed: Blockchain works as a shared system of record among participants on a business network, eliminating the need to reconcile disparate ledgers; 2. It’s permissioned: Each member of the network has access rights so that confidential information is shared on a need-to- know basis. 3. It’s secure: Consensus is required from all network members, and all validated transactions are permanently recorded. No one, not even a system administrator, can delete a transaction.

Another advantage is that blockchains lends provenance. Value chains are dependent on accuracy and transparency; when data is captured and secured at every step along the way from source to customer, businesses can prove that what they offer is what they claim. Kelley pointed to the example of gemstones. A blockchain within the diamond industry provides transparency on documentation, including high resolution images, and certifications that confirm the stone was sourced responsibly.

More broadly, with the provenance offered by blockchain, manufacturers can better prove goods are sustainably produced, and help yield insights into processes that may be degrading an organization’s brand … or building it.

Early adopters

Adoption is happening fast, Kelley said, pointing out that Blockchain is radically transforming industries and ecosystems at a rapid pace since its arrival in 2008 – where as commercial use of the internet evolved incrementally over the last 30 years.

Industries that are ripe for blockchain are those with processes that involve numerous people and paperwork and require the sharing of accurate data. Industries with complex value chains are leading the charge toward blockchain.

Blockchain is creating extraordinary opportunities for businesses to come together in new ways, create new value, exploit new business models and eliminate inefficiencies, optimize ecosystems, streamline business processes and the exchange of value, and reduce risk, replacing uncertainty with transparency through a trusted decentralized ledger.

Think of it as the new operating system for trust, says Kelley, across your business, your suppliers and customers.

Jason Kelly was a featured mainstage speaker at our recent Compete Through Service Symposium. For more information visit


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