Blockchain Brings Business Boom To IBM, Oracle, and Microsoft (fortune.com)

An anonymous reader quotes Fortune's new report on blockchain: Demand for the technology, best known for supporting bitcoin, is growing so much that it will be one of the largest users of capacity next year at about 60 data centers that IBM rents out to other companies around the globe. IBM was one of the first big companies to see blockchain's promise, contributing code to an open-source effort and encouraging startups to try the technology on its cloud for free. That a 106-year-old company like IBM is going all in on blockchain shows just how far the digital ledger has come since its early days underpinning bitcoin drug deals on the dark web. The market for blockchain-related products and services will reach $7.7 billion in 2022, up from $242 million last year, according to researcher Markets & Markets.

That's creating new opportunities for some of the old warships of the technology world, companies like IBM and Microsoft Corp. that are making the transition to cloud services. And products that had gone out of vogue, such as databases sold by Oracle Corp., are becoming sexy again... In October, Oracle announced the formation of Oracle Blockchain Cloud Service, which helps customers extend existing applications like enterprise-resource management systems. A month earlier, rival SAP SE said clients in industries like manufacturing and supply chain were testing its cloud service. And on Nov. 20, Microsoft expanded its partnership with consortium R3 to make it easier for financial institutions to deploy blockchains in its Azure cloud. Big Blue, meanwhile, has been one of key companies behind the Hyperledger consortium, a nonprofit open-source project that aims to create efficient standards for commercial use of blockchain technology.
A Juniper Research survey found six in 10 larger corporations are considering blockchain, according to the article, which adds that blockchain "is increasingly being tested or used by companies such as Wal-Mart Stores Inc. and Visa Inc. to streamline supply chain, speed up payments and store records."

And because of blockchain's popularity, the CEO of WinterGreen Research predicts that 55% of large companies with over 1,000 employees will use the cloud rather than their own data centers within five years -- up from 17% today.

Comments

Seriously?!

[Dorianny]

Its the .com craze all over again

Re:Seriously?!

[JaredOfEuropa]

No kidding. Remember the PHB from Dilbert asking for "a database" because apparently that's what the company needs. I thought it was a great joke, but now I've heard something similar more than once, from managers and from people who really ought to know better: "We need to do something with blockchain". By the way, I found a good answer to that is not "what", but "why".

Re:Seriously?!

[Hognoxious]

A database? Any particular colour?

Re:Seriously?!

[CaptainDork]

For my career, it was "push technology."

A PHB talked upper management into adopting a document handling system but the users weren't migrating from the old to the new.

He told me to motivate the users to use the new piece of crap.

I asked, "How, exactly, do you want ME to sell YOUR idea?"

(not making this up)

He said, "Get tough with them. Use push technology !"

Re:Seriously?!

[Darinbob]

Beige of course.

Surest sign it's in bubble/tulip territory

[LynnwoodRooster]

IBM is going all in

Really? From the article we read "The market for blockchain-related products and services [were] $242 million last year". IBM's revenues last year were around $80 BILLION. The entire block-chain market for products and services was about 0.3% of all of IBM's revenues. That's a VERY interesting definition of "all in" and clearly just an attempt to justify the unstable blockchain market however it can. In this case, by finding a way to hitch itself to a 100+ year old name...

Re: Surest sign it's in bubble/tulip territory

[LynnwoodRooster]

So if TFS gets a basic fact wrong, how can we trust it's conclusion that IBM is going "all in"? Again, this reads more like a cheerleader article rather than anything remotely factual...

Re: Surest sign it's in bubble/tulip territory

[F.Ultra]

Because this is about other uses for blockchains and not about cryptocurrencies or miners at all.

Blockchain! But, blockchained blockchain, too.

[ScentCone]

For my blockchainfast this morning, I blockchained up some scrambled blockchain with a side of fried blockchaing, and fresh-blockchained some blockchain juice so I would be sure to get my Vitamin B(lockchain). While I was blockchaining my blockchain, I read the Blockchain Post before hailing a blockchain for a ride to my downtown blockchain where we blockchained a meeting about the week's blockchain strategy and blockchained some references to blockchain into our corporate blockchain statement. Then off to blockchain for a three-blockchain lunch and a blockchained blockchain before heading to our blockchained client's blockchain to implement some blockchain in their blockchain.

Whew! What a blockchain of a day. Happy to be home in my blockchain so I can pop open a blockchain and sit down to blockchain Game Of Blockchains on the blockchain, and maybe play a little first-person blockchain VR, or get online and duke it out in World Of Blockchains before I turn in for a good night's blockchain.

Re: Blockchain! But, blockchained blockchain, too.

[LordKronos]

Funny, but that's literally what's going on...people are trying to find a way to wedge "blockchain" into everything. Things ive heard:

Medical records. Like, really? You want your medical records shared publicly? Or do just want things like document integrity and version history (ie: the features that aren't unique to blockchain) without the group consensus part (ie: the only feature that blockchain brings to the table over previous ideas).

Public records (marriage, property, etc). Really, who should be the authority here, if not the state/county/city? Trying to prevent them from altering records without your permission? How do you think they are going to do foreclosures and leins? Want to protect against unfiled documents on a title search? People can just as easily fail to properly record documents with blockchain. It offers much of nothing to the existing process.

We're really just seeing a buch of blockchain-for-the-sake-of-blockchain ideas. Any insufficiencies in existing processes can be resolved through non-blockchain means. If those processes need to be reengineered for blockchain, they could just solve the issue with a smaller, less invasive update without blockchain.

Re: Blockchain! But, blockchained blockchain, too.

[MachineShedFred]

Sure, but at that point what's the advantage over a traditional database that allows very computationally inexpensive inserts and updates? Buzzword-compliance?

Re:Blockchain! But, blockchained blockchain, too.

[Memnos]

I've evergreened a patent for an AI that blockchains the virtual cloud in a quantum Docker container. I'm going to be the first trillionaire.

Re: Blockchain! But, blockchained blockchain, too.

[F.Ultra]

Don't underestimate the buzzword-compliance factor. It drives a large portion of the IT industry!

Re: Blockchain! But, blockchained blockchain, too.

[lordlod]

A blockchain is a list of records which are resistant to modification. The current state is the accumulation of all the previous states, as such you can inspect the history to see each state alteration, this history cannot be modified without destroying the chain.

With this in mind, the records you mentioned such as medical, marriage, and especially property could potentially benefit from the application of a blockchain.

I own a property, I know this because there is an entry in the state database saying that I do. There is no deed or other formal evidence. If someone were to edit that database so that I never owned the property, things would be really awkward. An append only ledger would be a considerable improvement. The government seizing the property by adding the the chain is fine, as there is evidence of the transaction which can be disputed.

Using the cloud for critical stuff is suicidal

[gweihir]

You just do not have enough control and you cannot make sure your core business survives an outage. In addition. it does not really save that much money, it often ends up costing significantly more. Sure, if you do your own infrastructure, you need some competent IT people to run it and make it work well, but maybe refrain from paying peanuts and your IT people will not be monkeys. In the end you do not only get a well-working in-house infrastructure, you get people that care about your company maintaining it and you actual get in-house expertise for all purchases. You just need to realize that IT is critical and that IT is much more important than any of your other functions. That is hard for the "business" side of things.

Re:Using the cloud for critical stuff is suicidal

[aaarrrgggh]

As much as I hate sympathizing with the Blockchain!!! PR machine, the cloud is an environment where blockchain might actually make sense; you have (at least in theory) a very portable, yet verifiable “database” with distributed validation.

I won’t pretend to understand why some information benefits from such a “database,” as a ledger isn’t really a database unto itself. I also won’t pretend to understand why some information wants to be “committed” by a third party, unless it can actually validate the data.

But, IBM jumping “all-in” should be a sign that we are hitting peak-blockchain.

Re:Using the cloud for critical stuff is suicidal

[gweihir]

You do not need to build your own data-center in order to have your own infrastructure. Co-location of your servers is entirely fine for smaller companies. It wills till be your servers, under your administration. And that is what counts.

Re:Using the cloud for critical stuff is suicidal

[gweihir]

It is just bullshit hype. IBM wants a piece of that. For all real uses (except the increasingly discredited idea of crypto-"currencies"), standard revision-proof storage solves all the problems the blockchain solves and it does it better.

Re: Using the cloud for critical stuff is suicidal

[LordKronos]

As much as I hate sympathizing with the Blockchain!!! PR machine, the cloud is an environment where blockchain might actually make sense; you have (at least in theory) a very portable, yet verifiable âoedatabaseâ with distributed validation.

But blockchain's value isn't just in distributed storage, validation, or anything like that. Its value is how difficult it is to tamper. Why is it difficult? Because to tamper with it, you need to control the majority of it, which requires a massive investment in computational power. This works for bitcoin, because there is a broad community interest (including monetary incentive) to participate, which means to control it you'd have to invest many billions of dollars in hardware and electricity to take control. But for a private company, how much money are they going to invest to maintain this continual busywork network to secure their data? Any hacker with a botnet will easily be able to rewrite the chain however they desire. So unless they can convince the public to invest massive public resources to secure the private corporate data, the only new feature of blockchain vanishes instantly. You are better off just having a very well locked down signing server to serve as a notary for all transactions, or something like that depending on which feature you ACTUALLY want.

Re:Using the cloud for critical stuff is suicidal

[gweihir]

Who said anything about _one_ colocation place? And you seem to completely miss that you get all the outages of the cloud-provider for free, but with nothing you can do about them.

Satoshi Nakamoto ...

[CaptainDork]

... filed a patent for blockchain.

Digital Ledger.

[0100010001010011]

"Blockchain" is nothing more than a digital ledger with a checksum.

Nothing about using blockchain requires you to use the public ledgers (Like Bitcoin). You can control the entire ledger if you want.

Re:Digital Ledger.

[tomhath]

Yup. It's clear that most of the CEOs interviewed in the linked article have no clue what it is. But the buzzword is hot this season so they have to be all in on it, whatever it is.

Re:Digital Ledger.

[aaarrrgggh]

Massaging the numbers isn’t exactly an ethics thing; it is that there are different ways to interpret the same thing, and an accounting clerk (or even controlled) might not have all the information that the tax lawyer or tax accountant does. Much of it is not black and white.

Simple example— if you buy software on a subscription, that is treated differently than a traditional perpetual license. A 12-month subscription paid in August could be treated differently than a license purchased in April. Meals associated with a billable project may be 50% or 100% deductible. Many things are t black or white, so you might massage the parts to make the whole reflect the true condition.

Re:Digital Ledger.

[ShanghaiBill]

"Blockchain" is nothing more than a digital ledger with a checksum.

No. A blockchain is a DISTRIBUTED digital ledger with a hash (not a checksum).

The "distributed" part is what is important, since it means that no one party can corrupt it.

The fact that it is hashed, rather than merely checksumed, also means it is very difficult to corrupt.

Re:Digital Ledger.

[0100010001010011]

The "distributed" part is what is important, since it means that no one party can corrupt it.

That is how the current systems are setup.

It doesn't mean that Walmart can't setup an internal only "blockchain" that only runs on their intranet to track store balances.

Re:Digital Ledger.

[ceoyoyo]

You make it sound so fancy. It's a list. Like those lists they have in public toilets saying when it was cleaned. Except instead of signing your name on the list you sign it with "crypto", which is really just a math equation geeks used to get printed on t-shirts in the 90s as a way of saying fuck you to the US government.

Re:Digital Ledger.

[LynnwoodRooster]

Would you use a blockchain system when you needed to speed up transaction times? That's one of the claims of the article, and from everything I see, blockchain - BY DESIGN - gets slower and slower as more transactions are put into the chain.

Re:Digital Ledger.

[F.Ultra]

And what use would that be for Walmart? The distributed part of the blockchain is it's entire benefit (so that it's hard for a single entity to manipulate it).

Re:Digital Ledger.

[ShanghaiBill]

Would you use a blockchain system when you needed to speed up transaction times?

It depends on the "transaction". If you are trying to clear multi-party escrowed transactions, such as securities, bonds, or real-estate transactions, those can currently take days to clear and be recorded. A blockchain based system could reduce that to minutes, and possibly even seconds.

Re:Digital Ledger.

[swillden]

The "distributed" part is what is important, since it means that no one party can corrupt it.

That is how the current systems are setup.

It doesn't mean that Walmart can't setup an internal only "blockchain" that only runs on their intranet to track store balances.

Sure they can, but what value does it provide? A blockchain is more complicated and less efficient than a central database. If the concern is about having a single point of failure blockchains enable distributed consensus, but it's hard to see how that provides any value over a replicated database. It's hard for a well-placed employee to rewrite history with a blockchain, but that's also achievable with existing database technology, and in any case I don't see any evidence that it's a serious problem.

No, I see no value in a purely internal blockchain. There may be some value in using blockchains to establish distributed ledgers with partners (e.g. suppliers). Invoices, shipment records, receipt records, etc. could be stored in a blockchain so both parties are using a single distributed ledger rather than each maintaining its own database. Given that these sorts of processes are already thoroughly automated, though, it's not clear that a blockchain-based shared ledger would be that much better. My guess is that's the angle they're looking at, though, since it's the only thing that makes any sort of sense at all.

Re:Digital Ledger.

[swillden]

Would you use a blockchain system when you needed to speed up transaction times? That's one of the claims of the article, and from everything I see, blockchain - BY DESIGN - gets slower and slower as more transactions are put into the chain.

Blockchains don't get slower as more transactions are added. What makes you think that? They don't necessarily even consume ever-growing amounts of storage, since it's always possible to agree to add some new records at the head summarizing information in the tail prior to some agreed-upon point in time, and then discard everything before that cutoff.

I'm sure you get this idea from bitcoin, but it's not accurate even for bitcoin. Bitcoin hasn't gotten slower on a per-transaction basis, it's gotten a little faster, and would be dramatically faster if it weren't for the changes made to intentionally slow down mining (note that mining is not an inherent feature of blockchains, though it makes sense for public blockchains). No, the problem with bitcoin transaction performance is that the transaction volume has increased beyond the design capacity. Transaction throughput is higher than ever, but transaction latency is through the roof because transaction demand is higher than throughput.

With that said, I really don't see how blockchains are going to help much, given that supply chains are already thoroughly automated. Right now, each party maintains a separate database and they exchange electronic documents for orders, invoices, etc. With blockchain they can create a shared ledger, but this seems like a minor win at best.

Re:Digital Ledger.

[0100010001010011]

No, I see no value in a purely internal blockchain.

Agreed. It was just the farthest example I could think of from "Everything is public".

I can see a Walmart blockchain where they control 51% of the 'nodes' and force all suppliers to use it (and the have the clout to make it happen).

Re:Digital Ledger.

[Kaenneth]

> transaction volume has increased beyond the design capacity.

Not if the designed features (SegWit, and Schnorr Signatures) were in use by everyone on the network.

But hey, we are still mostly on IPv4, there is a lot of inertia to overcome.

Re:Digital Ledger.

[religionofpeas]

I can see a Walmart blockchain where they control 51% of the 'nodes'

They don't need that. All they need is a single server which signs all the blocks with a secret private key. Everybody with access can verify the data, but nobody else can modify it.

Re:Digital Ledger.

[religionofpeas]

The distributed part of the blockchain is it's entire benefit (so that it's hard for a single entity to manipulate it).

The distributed nature is accidentally related to the difficulty in manipulating it.

Re:Digital Ledger.

[F.Ultra]

Not accidentally, it's the only thing that makes it difficult (and verifiable).

Re:Digital Ledger.

[StormReaver]

The fact that it is hashed, rather than merely checksumed, also means it is very difficult to corrupt.

Until the hash is broken, and the entire house of cards comes crumbling down.

Re:Digital Ledger.

[religionofpeas]

I can make a clone of bitcoin, and invite a bunch of people around the world to start mining it with 100000 distributed raspberry Pis, and it would not be difficult to manipulate.

I can make another clone, and have 1 miner with 10 million ASICs, and it would be much harder to manipulate.

Re:Digital Ledger.

[F.Ultra]

of course, but then you can create a private blockchain which is what TFA talks about that is not distributed and not public and then you don't need any ASICs or rapberrys in order to manipulate it at all. That is the difference. In order to reap the benefits of a blockchain you must have a large community, something that you don't have with a private blockchain.

Re:Digital Ledger.

[swillden]

I can see a Walmart blockchain where they control 51% of the 'nodes'

They don't need that. All they need is a single server which signs all the blocks with a secret private key. Everybody with access can verify the data, but nobody else can modify it.

And each supplier could sign its own records in the chain with its private key. That would ensure that Wal-mart couldn't forge records from suppliers, and the hash chain would ensure that no one could rewrite history by removing or reordering records. It makes sense. What's not clear to me is that it's actually enough of an improvement to be worth the effort of retooling all of the existing automated systems.

Re:Digital Ledger.

[swillden]

> transaction volume has increased beyond the design capacity.

Not if the re-designed features (SegWit, and Schnorr Signatures) were in use by everyone on the network.

FTFY.

The original design simply cannot scale. The proposed modifications would help, some. I think it's very unlikely that anything short of a complete redesign and restructuring could make it practical as a significant global currency.

But hey, we are still mostly on IPv4, there is a lot of inertia to overcome.

Yep, changing is very, very hard.

Complete bullshit

[matthollingsworth]

Digital signatures and distributed databases have existed for decades contrary to the attribution by many of those to blockchain. My customers have had reliable inexpensive low-latency systems for decades that are far superior to anything that blockchain provides or could hope to provide in the future. Digital signatures and hashing are ubiquitous and widely used too. Blockchain is all hype. I've worked at Microsoft for decades and currently work with large companies in Southern California and Hawaii. The only customer I know looking at blockchain was a drug company and they were just doing it in a group that tests new technologies to examine benefits, not because benefits were being realized by adopting it currently. Blockchain and specifically Bitcoin has advantages for illegal activities though - facilitating illicit transactions for gun running, hit men, child prostitution, drugs etc. It's a great way to undermine countries with capital controls. It is probably useful for intelligence organizations to hide their activities and evade oversight. It's probably good for evading taxes and money laundering too. It's a great way to increase entropy in the universe for the lowest cost as miners compete. It provides more drama and headlines for news organizations who refuse to generate real news content. Oh, and as all can see it's the most friction-free global bubble making apparatus conceived since derivitives and the trusts in the 1920's.

Re:Complete bullshit

[BabyAndTheButterfly]

You don't understand what a blockchain is because you don't understand the meaning of decentralised consensus. This is not some dumb database replication. It has great advantages and use cases but most of the time a centralised solution should probably be preferable - ok, but that doesn't diminish the greatness of the invention.

Re:Complete bullshit

[matthollingsworth]

there have always been algorithms for decentralized consensus. What's new and useful about this in terms of new capabilities not already well covered by solutions?

Re:Complete bullshit

[BabyAndTheButterfly]

https://en.wikipedia.org/wiki/... The first very early solution is from 1999. Refer to the Byzantine Generals' Problem. What applications does this thing brings except Bitcoin as money (which is a huge thing in itself) we will start to see I think in late 2018 after all those ICO blockchain companies start to release products and also Ethereum network scales to be actually useable for all those apps.

Guessing this is mostly Bitcoin hype

[JMZero]

I think a lot of people are curious about blockchain technology because Bitcoin has been in the news - people don't want to miss out on the new thing in technology. It's natural that IBM and Oracle are going to use a wedge like that to try to get in the door with people, but I don't think that many businesses are going to have problems where blockchain tech is an important part of the solution.

Here we go again

[bobm]

Everyone is seeing how bitcoin has this great big distributed network and (in my experience) the people thinking we will us the same blockchain distribution haven't figured out that it's not going to be free to have multiple hosts for the chain.

link to another discussion: https://www.quora.com/In-a-pri...

I for one can't wait for Oracle to enter this market. (disclaimer - I hate Oracle).

No one was ever fired for choosing IBM

[jfdavis668]

What goes around comes around. Sometimes the old ways of doing something become useful again.

Check out the OTC/Penny Stocks

[future assassin]

Companies are making announcements and forward looking statements about blockchains and cryptocurrency. This is a pump and dump wet dream.

Re:I think people just like saying "blockchain"

[Anonymous Coward]

The whole concept (as far as computing goes) of Merkel Trees was patented in 1979. Many, MANY things have used it since then. "Blockchain" somehow managed to hit that magic sounds-more-awesome-than-it-is level of buzzwordiness AND it is an actual purchasable thing! Unlike synergy/paradigm/diversity/holistic ...

In particular, it doesn't surprise me to see Oracle and IBM on this list. They'll happily whore themselves out for a quick buck, with the promise of additional lawsuit settlement dollars to come afterwards.

Re:I think people just like saying "blockchain"

[GameboyRMH]

Not the same thing:

https://stackoverflow.com/ques...

However blockchain technology is still overhyped, because private blockchains are just inefficient databases. There's no good reason to use them where there is no trust problem between peers, so there are only a few niche industries where a blockchain would be helpful, such as digital notary services.

Anyone have a good layman's explaination

[rsilvergun]

of why everybody's so crazy about it? Is it really just companies hoping to offload their server farms to a distributed database ala bit-torrent?

Re:Anyone have a good layman's explaination

[ceoyoyo]

Yeah, just wrote one up above. Here you go:

https://developers.slashdot.or...

Oh, and you want to have a lot of copies of the list, because your scuzzy roommates like to use whiteout a lot. If you've got more copies than they can get to, you can compare and catch them.

Re:Smurf! But, smurfed smurf, too.

[rsilvergun]

For my smurffast this morning, I smurfed up some scrambled smurf with a side of fried smurfg, and fresh-smurfed some smurf juice so I would be sure to get my Vitamin B(lockchain). While I was smurfing my smurf, I read the smurf Post before hailing a smurf for a ride to my downtown smurf where we smurfed a meeting about the week's smurf strategy and smurfed some references to smurf into our corporate smurf statement. Then off to smurf for a three-smurf lunch and a smurfed smurf before heading to our smurfed client's smurf to implement some smurf in their smurf. Whew! What a smurf of a day. Happy to be home in my smurf so I can pop open a smurf and sit down to smurf Game Of smurfs on the smurf, and maybe play a little first-person smurf VR, or get online and duke it out in World Of smurfs before I turn in for a good night's smurf.

Estonia runs on blockchain

[ToughRat]

And the rest of the world is far behind: https://www.newyorker.com/maga...

Re:Estonia runs on blockchain

[F.Ultra]

Well great for Guardtime to scam an entire country into using their unnecessarily resource intensive technology I guess.

Re:I think people just like saying "blockchain"

[chuckugly]

Trusted 3rd parties are multi-trillion dollar opportunities.

Oh joy!

[Zontar_Thing_From_Ve]

The 3 greatest tech companies are leading the way! The future will soon be here!

Note to self: Blockchain may not be as important as many people think given who is leading the way with it.

Re: Using the cloud for critical stuff is suicida

[LordKronos]

By the way....WTF happened to the quotes around the word database? They weren't in his post, and I simply copy/pasted it into my quote tags. I am NOT using an apple device (oneplus one, lineage os, chrome browser). How did they get converted from normal ASCII quotes to Unicode? Is this something new in chrome? Some setting in lineage? I haven't see that before.

Old Technology

[PPH]

There have been some lending companies in New Jersey using blockchain for decades. Every once in a while, the chain slips off of a lender in arrears and the body pops up up in the East Channel.

No matter what new technology, we can trust IBM...

[AmazingRuss]

... and Oracle to make it burdensome and difficult.

Missed alliteration opportunity in the title.

[CaptSlaq]

"Blockchain Brings Business Boom To Big Blue, Big Bad, and Big Brother"

Re:Missed alliteration opportunity in the title.

[Actually, I do RTFA]

I didn't see FaceBook on the list of companies at all.

Prior art for IBM aside, I think it's a better company for any of those nicknames.