Cisco fosters Blockchain protocol development, IBM shows why technology could relieve security anxiety

Cisco has helped form a consortium to develop blockchain that could secure Internet of Things applications and more while new study by IBM shows why the technology could become invaluable for businesses worldwide.

Reports from Reuters and a press release from the group said that Cisco has teamed up with Bank of New York Mellon, Foxconn, Gemalto and blockchain startups Consensus Systems (ConsenSys), BitSE and Chronicled to form a blockchain consortium that said it will develop a shared blockchain protocol for aimed at IoT products.

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Per Reuters, the new consortium is but one of several large companies looking to build on blockchain’s secure and tamperproof technology’s. According to Reuters around 40 banks are members of a blockchain consortium run by startup R3 CEV, while technology firms such as IBM and Hitachi are part of a consortium led by the Linux Foundation.

“Companies in different sectors are looking at the technology, but some financial firms have forged ahead, recently announcing plans to deploy new blockchain systems this year,” Reuters wrote.

“The functioning of the group is voluntary at this stage with intent to emphasize nimble and fast-moving open source collaboration with any formal membership or governance structures emerging when necessary,” the group stated.

The consortium news comes at the same time IBM surveyed

200 government leaders in 16 countries about their experiences and expectations with blockchains.

“Nine out of 10 governmental organizations plan to invest in blockchain for use in financial transaction management, asset management, contract management and regulatory compliance by 2018. And seven out of 10 government executives predict blockchain will significantly disrupt the area of contract management, which is often at the intersection of the public and private sector,” IBM stated.

The study identified four areas where IBM said blockchain would provide the best benefits:

1. Citizen services: Despite modernization efforts, routine processes such as contract management, financial transaction management and regulatory compliance remain largely paper-based, costly and complex, with significant risks arising from errors and fraud.

2. Regulatory compliance: Nine in ten leaders believe blockchains can reduce the time, cost and risks of enforcing regulatory compliance.

3. Identity management: An estimated 1.5 billion persons worldwide have no legal identity or proof of birth, according a United Nations conference last year. Unable to open a bank account, own property or access government services, many are shut out of full participation in the economy and the creation of wealth, according to the website GovHack Hackerspace 2016.

4. Contract management: By using blockchains for contract management, issues such as the failure of any party to meet a deadline or complete a task, for example, could be more immediately visible. Over time, a vendor’s history captured on blockchains could be used to validate its reputation and trustworthiness.

Blockchain is the underlying technology securing bitcoin. CIO.com defines blockchain ss the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity, CIO wrote. “The real magic comes, however, from these digital ledger entries being distributed among a deployment or infrastructure. These additional nodes and layers in the infrastructure serve the purpose of providing a consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them.”

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