If the defining characteristic of data management in 2018 is the heterogeneity of contemporary computing environments, then Blockchain is a considerable factor contributing to its decentralization.
Expectations for this distributed ledger technology are decidedly high. Its low latency, irrefutable transaction capabilities are overtaking so many verticals that one of Forresterâs Top 10 Technology Trends To Watch: 2018 to 2020 predicts that by 2019 âa viable blockchain-based market will be commercialized.â
Blockchainâs growing popularity is directly attributed to its utilitarian nature, which supersedes individual industries and use cases. Itâs not just a means of revolutionizing finance via cryptocurrencies such as Bitcoin, but of implementing new security paradigms, legal measures, and data sources for Artificial Intelligence. Most importantly, it could very well herald the end of silo culture.
By helping to seamlessly connect heterogeneous databases around the world in a peer-to-peer fashion, its overall impact is projected to be âas disruptive as the internet was 20 years agoâand still isâ according to Algebraix Data CEO Charlie Silver.
For it to realize this future, however, there are a number of points of standardization within and between blockchain networks which must solidify.
They should begin doing so in earnest in the coming year.
Private Blockchains, Centralized Authority
The most common use of blockchain is for validating transactions and issuing monetary value for cryptocurrencies. These are typical instances of what is known as public blockchains, in which the ledger is distributed amongst individuals or businesses for sharing and determining the integrity of transactional data. What could truly trigger the expansion of Blockchainâs adoption, however, is the growing credence associated with private blockchains. These networks extend to only members of well-defined (i.e. not open to the general public) participants, such as those in a supply chain or for some other discreet business purpose. The strength of public blockchains is largely in the lack of a central authority which adds to the indisputable nature of transactions. In private blockchains, however, that centralized authority is the key to assuring the integrity of data exchanges. âWhat that means is there is a blockchain orchestrator that enables the interactions between the parties, coordinates all those things, provides the governance, and then when the transaction is doneâ¦you have permanent immutability, and transparency with permissions and so on,â commented One Network SVP of Products Adeel Najmi.
In addition to providing governance standards for all parties in the network, a centralized mediator also facilitates consistency in semantics and metadata which is crucial for exchanging data. Without that centralization, blockchain communities must define their own data governance protocols,Â semantic standards, and Master Data Management modeling conventions. The notion of standards and the legality of exchanges between blockchain in the form of smart contracts will also come to prominence in 2018. Smart contracts involve denoting what various exchanges of data mean, what takes place when such data is transmitted, and what parties must do in agreement with one another for any variety of transactions. However, the dearth of standards for blockchainâparticularly as they might apply between blockchainsâleads to questions of legality of certain facets of smart contracts. According to Gartner: âMuch of the legal basis for identity, trust, smart contracts, and other components are undefined in a blockchain context. Established laws still need to be revised and amended to accommodate blockchain use cases, and financial reporting is still unclear.â These points of uncertainty regarding blockchain correlate to its adoption rate, yet are to be expected for an emerging technology. Silver noted, âLike in the Internet of Things, thereâs all kinds of standards debates going on. All new technologies have it.â
One of the more exciting developments to emerge in 2018 will be the synthesis of blockchain technologies with those for AI. There are a number of hypothetical ways in which these two technologies can influenceâand aidâone another. Perhaps one of the more concrete ones is that the amounts of data involved in blockchain make excellent sources to feed the neural networks which thrive on copious big data quantities. According to Gartner VP Distinguished Analyst Whit Andrews, in this respect Blockchainâs impact on AI is similar to that of the Internet of Thingâs impact on AI. âJust like IoT, [Blockchainâs] creating a whole lot of data about different things making it possible for organizations to serve as an authority where previously they had to rely on others,â Andrews explained. âThatâs where Blockchain changes everything.â In public decentralized blockchains, the newfound authorization of business partners, individuals, or companies can enable the sort of data quantities which, if properly mined, contribute to newfound insights. âSo, maybe Artificial Intelligence again emerges as an exceptional way of interpreting that data stream,â Andrews remarked.
What is certain, however, is that the intersection of these two technologies is still forthcoming. Andrews indicated approximately one in 25 CIOs are employing AI today, and âthe figure is similar with blockchain.â 2018 advancements related to deploying AI with Blockchain pertain to resolving blockchainâs scalability to encompass exorbitant big data amounts. Najmi observed that, âDue to scalability and query limitations of traditional blockchains it is difficult to implement intelligent sense and respond capabilities with predictive, prescriptive analytics and autonomous decision making.â
Blockchain is reducing the persistence of silo culture throughout data management in two fundamental ways. The first is related to its low latency. The boons of a shared network become minimized if it takes inordinate amounts of times for transactions. Granted, one of the factors in decentralized blockchains is that there is a validation period. Transactions might appear with low or no latency, but they still require validation. In private blockchains with a centralized mediator, that validation period is reduced. Nonetheless, the main way implementing blockchain reduces silos is simply by connecting databases via the same ledger system. This latter aspect of blockchain is one of the reasons it is expanding across industries such as insurance and real estate. âIn the U.S. and maybe in Western Europe there is good infrastructure for finding out real estate information such as who owns what, who’s got a mortgage, etc.,â Silver said. âBut 90 percent of the world doesnât have that infrastructure. So think about all the global real estate information now being accessible, and the lack of silos. Thatâs the perfect use case of information getting de-siloed through Blockchain.â
At this point, the potential for Blockchain likely exceeds its practical utility for information assets today. Nonetheless, with its capabilities applicable to so many different facets of data management, its influence will continue to grow throughout 2018. Those capabilities encompass significant regions of finance, transactional data, legality (via smart contracts), and AI. Adoption rates ultimately depend on the viability of the public and private paradigmsâboth how the latter can impact the former and vice versa. The key issue at stake with these models is the resolution of standards, semantics, and governance needed to institutionalize this technology. Once thatâs done, Blockchain may provide a novel means of integrating both old and new IT systems.
âIf you think about the enterprise, itâs got 20, 30 years of systems that need to interoperate,â Silver said. âOld systems donât just die; they just find a new way to integrate into a new architecture.â
Exactly what blockchainâs role in that new architecture will be remains to be seen.