IBM’s Blockchain Technology for Finance
IBM always was a pioneer in information technologies. A famous example is the IBM’s technology in artificial intelligence. The Company began with artificial intelligence in 1956 when Arthur L. Samuel programmed an IBM 704 to play checkers with a self-learning program. IBM was one of the first Companies who saw the potential of AI and IBM was right.
This year, IBM began to offer the Blockchain Technology to the mainstream financial institutions.
What is the Blockchain Technology:
The blockchain is a decentralized network without any central authority to track and keep information on every block (dot) of the network. Blockchain technology uses cryptology for its safety and it is very safe, fast, efficient and cheap.
The digital currency Bitcoin uses the blockchain technology with ledgers (books) kept by every Owner (block) to record the ownership of Bitcoins and transactions. Ledgers are trusted and very hard to fraud. According to Wall Street, more than 40 top financial institutions and a growing number of companies across industries are experimenting with distributed ledger technology.
IBM’s Blockchain Service:
IBM is building a blockchain for seven of Europe’s biggest banks: Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit. The IBM’s blockchain would be the first application in financial mainstream.
The banks will use the blockchain not for cryptocurrencies but for own transactions to make them more cheap and fast.
Wiebe Draijer, chairman of the executive board at Rabobank, told CNBC in a TV interview:
“We take care of the payment that’s still the old payment technology,….but the whole infrastructure, the administration is done on the blockchain. And ultimately we will also move the payment into that blockchain solution when the payment in blockchain is ready to be robust for large-scale application…There are many many tests and every bank and every fintech is experimenting with use cases of blockchain. We are moving a step further with seven banks, putting together an application based on blockchain where we facilitate small-and-medium-sized enterprises when they export. And the blockchain technology is very powerful and supports that proposition,”
IBM’s blockchain service is a part of the Hyperledger Fabric project which also includes State Street Bank, Accenture, Fujitsu, Daimler, Hitachi, and Intel (members). The Goal of the Project is providing “an operating system for marketplaces, data-sharing networks, micro-currencies, and decentralized digital communities“. The Hyperledger defines itself as “communities of software developers [open source, collaborative software development] building blockchain frameworks and platforms.”
IBM supports the Hyperledger Project with its cloud service and for the security of the blockchain, the Company uses its SecureKey service. But as mentioned above, Hyperledger Project is not only for online transactions but also for data sharing and building marketplaces and communities.
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