Blockchain Case Studies

Let’s start this time with some laugh. I have always liked Dilbert because it captures a great deal of reality that it is simply unbelievable. I also like the power of below quote from Albert Einstein:

“Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world”

As promised last time, in this entry I will be exploring a few case studies where Blockchain could be used. My goal is not to talk about any integration with Bitcoin technology but rather how we could use Blockchain as part of the solution.

1)    Land Registry

How it is done today: The most traditional way of property registry is controlled and safeguard by government institutions. In some countries this job is done efficiently, and in some cases very inefficiently – In some Eastern European countries registries are still done manually using stacks of paper.

Proposed solution: There is an opportunity to move all this data into a safe, transparent infrastructure guarded by cryptography and guaranteed integrity of data. For example, in Sweden a private-public effort is in development in this area. Startup ChromaWay is currently ongoing testing of a Blockchain solution for Land registry. Of course governments and financial institutions must support this type of initiatives; some of the governments considering a similar approach are Georgia and Honduras, for example.

Reference:

http://www.coindesk.com/swedens-blockchain-land-registry-begin-testing-march/

2)    Asset Tracking

How it is done today: Assets are tracked in the separate ledgers of every participant in the lifecycle of the asset.

Proposed solution: In cases where parties involved during the lifecycle of the asset are using distributed ledger, then there will not be duplication or the risk of multiple entries. The network guarantees the uniqueness of the asset. There is no possibility of duplication. And why is that? Network is using consensus to confirm each entry in the Blockchain, which prevents any party to separately modify its ledger.

By using a smart contract and distributed ledger, this ecosystem will enable single instance of asset through its lifecycle

3)    Blockchain and Future House Purchases

How it is done today: We have buyer’s agent, seller’s agent, a escrow account in a financial institution, a buyer’s financial institution, and a long and time consuming process. With homeowners selling their properties every 5 to 7 years, Blockchain technology has the potential to impact million of people. How can we transform this cumbersome process into a faster, safer and cheaper transaction? Let’s explore.

Proposed solution: I mentioned the concept of smart contracts in my previous post. Its role in this use case is crucial. Let me explain it one more time: Smart contracts are self-executing programmable contracts (computer code) that automatically carry out functions once the triggering event happens. In one of the next articles I will talk about how to create smart contracts. According to one of the articles from The World Economic Forum, smart contracts are secured in the Blockchain as “self-executing contractual states”. Thus by using Blockchain technology, the industry could:

1.     Save by eliminating transaction fees for buyer/seller agent, banks and any other intermediaries

2.     Minimize turnaround time

3.     Eliminate escrow as Blockchain is only a source of trust

4.     Eliminate manual process for requesting mortgages

4)    Trade Finance

How it is done today: Banks play an important role in risk mitigation and offering financing for both domestic and international trade. Banks help companies with financing products, manufacturing cost, getting working capital, comply with regulations, fraud prevention, and guarantee the credit worthiness of businesses that do not have yet established working relationships. Trade Finance provides companies with the funds and security they need to buy and sell products and services both domestic and international. This process involves a lot of documents and signatures. As I will explain shortly this is a perfect fit for Blockchain 2.0 technology stack.

Proposed solution: Trade Finance can definitely benefit from Cryptotechnology. You may wonder what are those enablers that make this technology suitable to Trade Finance? Let’s list it:

1.     Transparency - improve credit rating, credit history and risk assessment procedure

2.     Immutability – No one can change the block (ledger entry) without consensus of participating parties

3.     Auditability – all history is maintain in the Blockchain

4.     Safety – as both buyer and seller are on the same infrastructure prevents fraudulent invoices and duplication of invoices.

With all of these benefits the industry could cut a lot of waste in paper and time, and customers could get necessary funds faster. Some initiatives in this field already exist if you would like to read more about them, visit: http://www.coindesk.com/dubai-ibm-blockchain-trade-finance

Some other applicable case studies include tracking inventory, warranty tracking, and insurance policy tracking. This demonstrates the impact that cryptotechnology is going to have on all industry verticals.

Welcome to the future.

The Evolution of Bitcoin Technology

From the moment Satoshi Nakamoto released his white paper on decentralized Internet currency and first reference implementation, Bitcoin has attracted a lot of interest not just from the financial domain perspective but also as P2P distributed platform. From a business domain perspective, Bitcoin has provided a currency that is not controlled by any government or institution but by fully transparent mathematical principles –cryptography.

Of course this is very fascinating, but what is even more fascinating for me though is what the underlying technology has to offer as a new paradigm and potential to change how we build applications in the future -Or maybe the future is already here?

The backbone of Bitcoin is blockchain technology -peer-to-peer distributed crypto ledger-and the potential for this innovative technology and applicability is actually huge. It is expected that this technology will disrupt existing the financial business models.

What does blockchain technology offer?

Blockchain technology is built on a series of innovations in distributive data organization and sharing. Blockchain’s goal is to create a single version of truth.

There are 7 key innovations that make up blockchain today:

1.     Encryption – encryptions enable security and data anonymity in shared environment

2.     Mutual consensus verifications protocol – this protocol allows the network to get consensus on the updates of the data. There is no need for centralized governance.

3.     Smart Contracts – a really powerful concept. Smart contracts are programs or code uploaded to a distributed ledger. They are programmed to generate instructions for downstream process if certain conditions are met; for example, payment instructions or moving collaterals. Hence, the leger entry is not just a passive data anymore.

4.     Universal data source – these new technologies enable multiple parties to work together with the same data source.

5.     Transparent real time data – the whole history of the entry is tracked. Authorized parties can review the full history of any coin from the moment it is created. With encryption and selective control, participants can reveal a part or the complete trusted data to a third party.

6.     Decentralized Consensus – This paradigm break the existing financial system centralized consensus. In order for transactions to be added to the block as a chain, all participants in the network need to agree on that. The only significant drawback is that this method is not environmentally friendly as it consumes a lot of processing power, but reaching consensus is at the heart of blockchain technology.

7.     Rich datasets – originally, blockchain kept only transactional data, but the new generation is able to keep more complex data objects and smart contracts.

Eventually more efficient settlements of transactions and processing will occur as everyone is able to see the same data and any updates are quickly propagated across the network. This will bring us to a point when we will not need any more third party clearing houses, escrows, government controlled or bank records. Since all parties could use the same underlying dataset for trade-related processes, blockchain will reduce the scope for data errors, disputes and reconciliation time, speeding up the end-to-end process.

This is an introduction to this innovative technology; in my next blog entry I’m going to explore few use cases where the use of this technology is a game changer.

Big Data and Real-Time Analytics

One of the hot topics these past few years has been Big Data. Everyone is jumping on this bandwagon for a good reason. Big data is able to provide insights into your business, forecasting and drive better decision-making. Companies that use data for decision-making have demonstrated better performance results. With the large amount of information that businesses can access today, a problem has emerged regarding the time required to process all this data.

So far, all analytics and decision-making have been done by processing data offline -batch processing, but what to do if we need this in real-time? How to get faster response so that businesses can make the right choice in time. Any business that I am familiar with today is looking for almost in demand reporting and the ability to react thereafter in a short span of time.

Our world is just getting more complex. Now we have two problems to worry about: the large amount of data to store on constant basis, and the analysis of this vast amount of data in real-time.

What is the right approach to solve these problems?

Maybe you are already muttering the right answer: Hadoop 2.0. This is the definite solution for managing and processing structure and unstructured data. It introduces HDFS federation file system and comprises two major components namespaces and blocks storage service. While the namespace service manages operations on files and directories such as creating and modifying files and directories, the block storage service implements data node cluster management, block operations and replication. HDFS federation brings important measures of scalability and reliability to Hadoop.

The other major advantage of Hadoop 2.0 is YARN.

YARN is a resource manager that has been created dividing the processing engine and resource management capabilities of MapReduce as it was done in Hadoop 1. YARN is also called the operating system of Hadoop because it is responsible for managing and monitoring workloads, maintaining a multi-tenant environment, implementing security controls, and managing high availability features of Hadoop.

With this improvement that 2.0 is brings and the integration of Elasticsearch -search engine based on Lucene, we are getting to the blueprint of a real-time analytics platform. From the first day, I was impressed with Elasticsearch. Having worked with Solr, yet another search engine implementation based on Lucene, I found a big problem with indexing as my database grew in size. Elasticsearch has resolved my problem very simply as it has real-time indexing. A powerful feature for today needs when we want everything simultaneously. Here are some additional features that demonstrate how Elasticsearch is a natural fit with Hadoop:

1. Elasticsearch integrates with Hadoop and enables Hadoop to directly index as shown on the image above I created for illustration purposes.
2. Elasticsearch can use HDFS as a long term archive
3. Allows queries directly from Hadoop
4. Elasticsearch provides a robust query language
5. Elasticsearch has a real-time indexing engine

These are ideal examples of where real-time analytics makes a significant difference:

• In Customer Relationship Management (CRM) real-time analytics can provide up to the minute information about the customer so that businesses decisions can be made fast. Real-time analytics can support instant updates to corporate dashboards to reflect these business changes.
• In the financial sector where we need to make fast decisions based on available information at that moment (buy, sell or hold).

Innovation - Personal Development - Part 3

What can we do as individuals to improve our innovation skills? The question here is what is it that make some people special? Is it an innovation gene that they have or some skill that they build? Of course, there's always going to be geniuses that walk among us but the question is can we increase our discovery skill-set and minimize the gap? The answer is yes. In this post I am going to talk about a few skill-sets that help individuals in improving their innovational ability.

Studies have shown there are five skills that one can work on to improve one's innovational ability. These skills can be improved through regular practice and exercise. So lets go through these five skill-sets and see what they are:

Association

Association is the ability to make a connection between items that are not visibly correlated. To do so one needs to have a set of tools in one's toolbox. It is almost like Lego blocks. To do so the first thing is to fanatically collect and document your ideas. There are a number of inventors and entrepreneurs in recent and distant history that have done this. The lesson learned is to keep your ideas organized and documented; you never know how your brain is going to wire them.

Challenge the Status Quo

People that are innovative do not accept the status of "that is how we do thing here. Instead, they are looking for better, more effective solutions that in some cases even create totally new products or ways of doing things. In most of the cases, however, it's just an evolution of existing products with improved functionality, design or performance.  Practice to observe and question solutions, think about weaknesses and how can they be improved. Human society is evolving only by constantly challenging and improving the present.  

Curiosity 
I do not know if you have ever practice 5Why's, but it is amazing what you learn by asking and digging slowly into the problem. With every step, the problem is peeled like an onion (learned that from the Shrek movie :). There is a great example in the book Lean Startup by Eric Ries.

Networking
This is very simple. Use your network not to sell your ideas but as a sounding board. Test your ideas by talking to your friends, partners and family members. Make sure that you capture feedback and that you seriously consider that same feedback. Different views on the problem, or solutions can move you in the right direction.

Experimentation
Interestingly enough there are two different types of experimentation. One that is physical that is usually done in labs. And the other one that is abstract and done in the inventors' mind. A great example of a lab experimenter is Edison, who had over 10,000 attempts before he created the light bulb. On the other hand, Nicola Tesla, an inventor from the same era, built his prototypes in his mind before actually starting the task of construction.

If you are serious about improving your innovation skill-set, make sure to set time aside and start practicing these tips. Till next time. Cheers.

Innovation - Build your innovation culture - Part 2

I'm back with my thoughts on innovation. In this article I will cover the innovation framework and some of the techniques that can be applied in order to establish and improve Innovational culture in your organization.

The most innovative companies follow the 3P framework. This framework is base on People, Process and Philosopy (reference to The Innovator's DNA by Jeff Dyer, Hal Gregersen and Clayton M. Christenson).

3P's

People
First of all, People are the ones who innovate. It is necessary that the senior management team lives and breaths innovation. They need to truly believe in it, promote it through organization and excel at discovery. The organization needs to monitor and maintain an adequate proportion high discovery skilled people at every level vs. delivery skilled people.

Process
Second, the organization needs to have a process in place in order to repeat success and to learn from its mistakes. This process needs to include the following phases: collection, selection, goal setup, approval and monetization. One simple and effective processes is "The i5 Process".

The I5 Innovation Process

 Each phase of the process starts with an 'I', thus the name. For more information please check "Innovation in a Box".  The Process and tools are here not to create innovation but to help the organization with it. It definitely helps if these tools are of interactive nature; for example, utilizing an intranet for improving the accessibility and usability of the process, which eventually effects the adaption rate.

Philosophy
Companies that encourage innovation have the following four pillars as a foundation of their innovation culture:

Innovation Culture

1. Innovation is everyone's job
2. Disruptive innovation is part of the company's innovation portfolio
3. Deploy lots of small, properly organized innovation project teams
4. Take smart risks in the pursuit of innovation.

From my perspective, the first and foremost important step in building an innovation driven company is to build the Innovation Culture. This is achieved through a strong visionary management team, with a process and structure in place, where investment is done on building the required skill set and with an attitude that failure and experimentation are viable options.

Here are some techniques that can help in building a more innovative culture:

Idea Management Process

Knowledge sharing across the organization
I do not even need to highlight how important is to share knowledge and information across your team members. Some techniques are well-known such as corporate intranet, billboards, and informational monitors across the office. The whole point of doing this is to benefit of the collective innovation capacity. 

Thus, in order to inspire an innovational culture you need to build a culture that explores the ideas that are on the market right now, collect them as study and inspiring material, share them among team mates and encourage an environment where those ideas are discussed.

Idea Collection and Management
In order to action knowledge sharing it is obvious that we need to have an infrastructure in place for idea collection, taxonomization and management. This enables us to have a system that allows us to use our collection as research material and reference material for future needs. A simple mechanisms to achieve this is by using excel spreadsheets. A more sophisticated way is to use a well-structured database and search engine. Go for a simpler solution as the first step.

Risk taking - experimentation 

In order to have a culture of innovation one needs to be free to experiment and fail. Learn from past experiences but do not repeat the same mistake. By saying this I mean: all results need to be recorded and lessons need to be learned from past failures. Only by having the freedom to fail one will be free to perform experiments, but do not repeat failures. 

Embrace a culture of questioning

Promote an environment where every question is treated with same importance and respect. Only if one asks questions, one will be able to make the change - innovation. The best innovators are people who constantly are asking questions and at the same time look for solutions. They do not accept the status quo as a viable state.

In my next blog entry I will be talking about how to learn and grow an individual discovery skill. 

Till next time...