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Thumbnail Update on Blockchain

This is Chris Halliwell, Executive Director of the Technology Marketing Center, veering away from our marketing process focus, to indulge in a small series of topic posts.  

Blockchain Logo

There are always technologies on the horizon that we will eventually have to deal with in our product and market strategy at some point in the future, think big data 5 years ago.  Some senior executive will ask us about the technology and what it means to our business.  So, to start to get you up to speed, our first technology thumbnail: blockchain.  Hope this helps.

What is blockchain storage technology and what's so great about it?

Blockchain technology enables distributed databases that store copies of information on 100s of computers.  The computers all have to agree to the validity of a data transaction, thus potentially eliminating the cost and "friction" of middleman functions in everything from digital money transfers to cloud storage providers.

"Rather than store your files on Dropbox or Onedrive cloud servers, what if your files could be split up into tiny chunks and stored on 1000s or millions of people's computers around the world…and only you have the key to view the pieces as a whole, and no organization owns your data?"  Jamie Skells,

And importantly, with one recent spectacular exception, blockchain storage technology addresses "honeypot" security issues that make headlines as centralized and human-managed databases are routinely hacked.  Database and network security issues are significantly abated, shifting security concerns to distributed, individual user authentication technologies such as long encrypted keys.

How fast will we see blockchain take over cloud storage architecture?

Ultimately experts agree that blockchain will become the best cloud storage option.  As Marco Iansiti and Karim Lakhani write in the January-February issue of Harvard Business Review, "Blockchain is foundational technology: it has the potential to create new foundations for our economic and social systems."  The technology has been employed by Bitcoin since 2008, so when will it go mainstream? 

Iansiti and Lakhani use the adoption path of another foundational technology, TCP/IP, to outline a probable scenario for widespread blockchain implementation:

  • First, find an initial compelling application: For TCP/IP in the early 70's this was a national email network not dependent on dedicated lines – for blockchain this is digital currency.
  • Second, target enterprise use of the technology: For TCP/IP a few tech-savvy firms created private localized networks, and then expanded to productivity enhancing use cases.
  • Third, make the technology "consumer easy": With the introduction of browsers, TCP/IP enabled widespread consumer use of the worldwide web in the mid-90's.
  • Finally: provide the tools to proliferate applications based on the foundation technology: Innovation in web applications created today's behemoth digital corporations, lowering costs and increasing convenience for consumers in a myriad of astounding ways.

Where is blockchain in the cloud storage adoption process?

Blockchain technology is just entering the early adopter phase of enterprise adoption, typically creating internal, private databases focused on a single use case.  This pilot test phase will prove out the viability of blockchain technology and teach innovators what they need to know as they look to expand to other use cases within the organization.  As Iansiti and Lakhani report, the Financial Services sector is well down the road experimenting with digital currency type private uses, while the broad Manufacturing sector has not yet started trials.

Got any suggestions for Thumbnail Updates?

Send them along by commenting on this post and I'll do some research for a blog post.


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