Will Blockchain Change The World?

Shared ledger technology could help consumers protect their identities.

By Pam Brodsack

Sponsored by TMG

Can blockchain technology really change the world? Truth is, the world is already changing. While blockchain alone will not tip the planet on its axis, it may very well accelerate change by helping leaders reimagine business models, processes and solutions. Much of the reason the technology has people so excited is because of its promise to inject transparency and immutability into any situation, project or process it’s tracking. These qualities make it possible for us to imagine a single source of truth--one ultra-secure system that stores every piece of data we will ever need, never forgets it and makes it available to everyone.

What Is Blockchain Technology, Anyway? Its essence is an unchangeable, shared ledger. Transactions are encrypted, recorded chronologically and shared publicly. The technology is a mash-up of other technologies, including distributed database and cryptography. Blockchain solutions can have one of two configurations: permissionsed--someone or something controls access--or permissionless--completely open; no control over access. Blockchain lends security because it stores precious digital cargo in blocks that are digitally stamped and distributed across multiple sites. If a block is maliciously altered, this action is immediately detected, and an unaltered version is retrieved from another digital location.

How Will We Use Blockchain? At this early stage, it seems blockchain technology’s greatest contribution to the financial industry will be transparency and security. People, businesses and all manner of things have become more connected in the digital space, creating the emerging need to maintain our individuality--or, more to the point--to protect our identities. Consider the nation’s largest data broker, Acxiom. It claims to have, on average, 1,500 pieces of information on more than 200 million Americans. It’s in the business of selling that information, so one can only imagine how many third parties have access to this valuable consumer data. How many of those parties have strong commitments to security? How many are vulnerable to data breaches? How many may be interpreting the data in irresponsible ways? Blockchain technology may be an answer to how a consumer could finally own his digital identity. No one could sell it, steal it or duplicate it without permission--or rather, without the right security key--more specifically, public and private key pairs. Blockchain could have a dramatic impact on the way we authorize everyday financial transactions. I emphasize the word could because the manner in which a public ledger that is accessible to everyone will truly protect our identities has not yet been developed.

What Are the Hurdles Facing Blockchain? Blockchain developers must overcome four challenges if they are to see the technology reach its potential: interoperability, ownership, blockchain’s complicated history and integration. Blockchain is likely capable of advancing the goals of the world’s community financial institutions and the consumers they serve. If the opportunities are out there, TMG intends to find them. Stay tuned.

Pam Brodsack is chief technology officer of CUES Supplier member TMG, Des Moines, Iowa. As one of several leaders working with TMG strategic partner CO-OP Financial Services, Rancho Cucamonga, Calif., and Mercator Advisory Group, Maynard, Mass., on a series of blockchain studies, she has a front-row seat for exploration of the technology. Register to read the free white paper, “Will Blockchain Change the World?” Attend CUES School of IT Leadership, Sept. 27-29 in Charleston, S.C., and leave having developed a strategic IT action plan.