The following are some more important excerpts from his webinar on “The Blockchain Wave in 2019 and Beyond”.
The first part was published some weeks ago.
The professor explained the major challenges for Blockchain adoption using the following infographic from 101blockchains.com: (A larger image is available here)
In summary, the following are the main challenges according to Prof Ahmed:
- Processing Time: Takes 2 minutes for a transaction, some can take 10 minutes; whereas credit card normally takes 3 seconds
- Scalability: how to scale the technology to be enterprise level. Potential solution is IBM’s Hyperledger on which over a 1000 engineers are working. Like in AWS, a company can scale depending on requirement by adding more processing power
- Energy Consumption: very high, syncing so many machines for every transaction consumes huge power
- Public Perception: Blockchains are used for money laundering, ransom payments for those who fall victim to ransomware, and so on. This has led to public being wary of blockchains
- Skills Shortage: Lack of blockchain engineers, developers who can make apps to make it marketable
If the above problems can be addressed, then, according to Prof. Banafa, blockchain will be widely implemented.
Another important aspect that was brought out was that whatever is fed into the blockchain will be processed by it. If the data fed in is faulty, blockchain will not concern itself with the veracity of the data. The principle of ‘garbage-in-garbage-out’ applies to blockchains as well, the professor pointed out. He termed the initial input as the first mile and the process that is done is called the last mile.
Quantum Computing and Its Impact on Blockchain
Blockchain does not exist in a vacuum, he remarked. Technologies like the Cloud and AI interact with blockchain and with each other. Quantum computing, though not expected to become mainstream any time soon, will impact all these technologies. The speeds that are expected of Quantum computing will be a game-changer, in that it may allow hackers to break into the blockchain and, mine data in all the blocks and replace it with other data, he cautioned. (It may also bring new and even stronger techniques that will make blockchain more secure).
The Prof. advised that students must spend time reading about quantum computing, since in 5 years time it may become the new technology to use. Google and NASA (and IBM) are working on quantum computers. Quantum computing can also solve some of the challenges of blockchain related to speed.
The illustration below shows how Quantum Computing will enhance AI (by allowing AI to tackle new problems that were previously incalculable), Cloud (Cloud computing will provide both the data storage and the processing power necessary to train new AI models, in turn making cloud infrastructure a critical part of organizations) and Blockchain (allowing even stronger techniques that will make blockchain more secure)
Editor’s Note: Gartner has a good definition of Quantum Computing:
“Quantum computers are an exponentially scalable and highly parallel computing model. A way to imagine the difference between traditional and quantum computers is to imagine a giant library of books. While a classic computer would read every book in a library in a linear fashion, a quantum computer would read all the books simultaneously”.
Deciding if Blockchain is Actually Needed
The following flowchart will be helpful in deciding if your organization needs to use blockchain, the professor indicated:
Types of Blockchain
Public Blockchain is one in which you need no permission to enter. Bitcoin and Ethereum are examples of public blockchain.
Private Blockchain is created by a company and you need explicit permission to access it.
Hybrid or federated blockchain. In this type you have a group of companies or representative individuals coming together and making decisions for the best benefit of the whole network. Thus, it is also called consortium or federated blockchain.
Shift in Blockchain Consulting Engagements in 2018
Prof. Ahmed pointed out that, as compared to 2017 when most of the consulting engagements in blockchain were involving the banking sector, the year 2018 saw a much wider acceptance of the technology. The infographic below from Gartner shows the spread. Indeed the banks have a reason to be more involved in blockchain since this technology came into being to enable people to send and receive money without the agency of the bank having any role to play in the entire transaction.
While it was Bank of America that had occupied the top place in terms of usage of blockchain in the earlier years, it is now Alibaba, the Chinese B2B platform, that is the heaviest user of blockchain.
Blockchain Technology Stack
We are used to the OSI Stack from the networking days which consisted of 7 layers starting from the physical layer right up to the application layer, and it is useful to view blockchain technology in the form of layers, said the professor. I advise my students who are working on projects to divide their work in layers so that they can work on each layer distinctly, he stated.
He used the infographic below to illustrate the blockchain technology in discreet layers. A larger image can be found here. (Another illustration of the Blockchain technology stack by Deloitte can also be referred to)
Part 3: Will cover IOT, AI and Blockchain in action; Three tracks of blockchain technology, Blockchain Use Cases; Wheel of Opportunities, and Smart Contracts