IBM has taken a serious interest in exploring the boundaries of blockchain technology, as they want to see how distributed ledgers can integrate with existing infrastructure. Over the past few months, there have been several successes for the company, including the Linux Foundation’s Hyperledger Project, as well as creating their own Open Blockchain service. But IBM is not resting on their laurels, as they want to further investigate the usage of blockchain technology for driverless cars and in Internet of Things environments. Shadowchains can play an integral part in the company plans.
Also read: Oh Brazil! Only Smart Contracts Can Save You
Blockchain development has seen many different types of potential solution to address scalability, including block size increases, off-chain transactions, Merkle trees, and even sharding. But IBM is looking to create something entirely different, as they are considering the option of introducing shadowchains based on distributed ledger technology.
To put the concept of shadowchains into perspective, it is important to keep in mind IBM Global Finance is a financial institution under the IBM umbrella. The business model of this entity is lending funds to other parties, which generates a lot of different invoices all year round. Moreover, with over 4,000 partners in the network, scalability can become an issue over time.
Rather than revamping the entire financial infrastructure, or even considering the global financing business model, blockchain technology can offer a way out. A shadowchain has been created, which is aimed at enriching the business process, rather than replacing the primary business model completely. Shadowchains bring useful functions to the table that are not possible when using traditional technology.
Under the hood, these shadowchains exist to record key events along the lending process, while ensuring no unnecessary delays are grinding the transaction to a crawl. Delays have been plaguing lending services and platforms for quite some time, and facing a delay of up to 30 days is no longer acceptable. Moreover, solving disputes would take approximately ten days, rather than forty days as is currently the case.
Despite the promise shadowchains hold, none of the IBM Global Finance partners are venturing into the world of blockchain technology just yet. However, this development marks an exciting milestone along the way of moving the lending process over to distributed ledger technology.
Open Blockchain & Hyperledger
Other than shadowchains, IBM keeps hammering away at their other projects. First of all, there is the Open Blockchain initiative, a project that started about eight months ago. The main purpose of this concept is to build a permissioned blockchain that can be configured by the end user to be as open as they would like it to be. Privacy, auditing, and confidentiality are all supported, and consensus algorithms can be plugged in. Additionally, IBM is planning to reveal a second implementation for building smart contracts on the Open Blockchain protocol, which is also part of the Hyperledger project.
Speaking of Hyperledger, there appear to be a lot of interested parties working on this project, yet very few of them are actively developing the code. Based on a statement made by IBM VP of Blockchain Jerry Cuomo, there are three “dominant voices in the technical side of the community”. Keeping in mind how there are various code contributors involved in this project – including Blockstream, Intel, and Digital Asset Holdings – it remains to be seen how everything will click together.
R3 CEV is another partner working on the Hyperledger Project, as they want to provide banking frameworks on top of the blockchain. However, that is not the primary objective for Hyperledger, as this project is intended to serve all different industries, rather than just finance.
What are your thoughts on the progress IBM has made, and the future of their projects? Let us know in the comments below!
Source: IB Times
Images courtesy of Hyperledger Project, IBM
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.