By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies
Ernest Hemingway once wrote, “The best way to find out if you can trust somebody is to trust them.” That’s certainly an interesting viewpoint. Many men and women would rather suggest to not trust someone until he or she can be trusted. The problem with the latter is the propensity one may have to always look for an action, a phrase or a reaction that would prevent the trust from ever becoming a reality. Trust among individuals isn’t all black or white. There is a lot of grey. Thus, the “trust card” for example is oftentimes used to influence, manipulate, or control. However, when applied to technology, I believe that trust does become black or white. You can indeed trust a technology or not based on its potency and security, and there is no room for interpretation. The facts and the data to back those facts up are there and available.
In the last few years, the multiple accounting scandals and data breaches among many other painful events have created distrust on several levels. Let’s take the Equifax data breach. As a consumer, today I do not trust the cloud-based centralized system Equifax has in place nor its level of security (in spite of what they’re now proclaiming), I do not trust the company’s IT Leaders for the choices they’ve made that led to the breach, and I certainly do not want my personal information (especially my social security number) to be stored inside their servers. In a B2B transactional environment, I also want to make sure the businesses with which Amalto partners can be trusted, and that especially pertains to their technology and the way they manage their data.
Do I trust trading partners that use a central platform in the cloud? Yes, but… Do I trust trading partners that leverage Blockchain technology to streamline operations in which we are involved? Yes, because:
- A Blockchain network consists of several decentralized databases or nodes. Each node acts as an administrator, which signifies that each node verifies the validity of a new data that is pushed (or stored) to the Blockchain. So, unlike for cloud-based systems, authority is not centralized, which in itself dramatically limits if not eliminates the risk of data being compromised.
- The information stored is shared among all databases and continually reconciled.
- A Blockchain offers 2 Data Functions: (Transaction) Validation, (New Transaction) Writing. Do you see “Create,” “Update,” or “Delete?” like for a centralized database? Nope.
- A new data is stored inside every single node and cannot be overridden.
- A Blockchain network self-audits every 10 to 15 minutes.
- The Blockchain network’s self-auditing capability would flag any node showing an issue and correct the error.
- To attempt to compromise the entire network would require using a huge amount of computing power, and consequently financial resources, to override the system.
- Each transaction that occurs in the Blockchain is verified through the process of mining. “Miners” are highly specialized computer systems that receive the elements of a transaction and verify its validity by running an extremely complex algorithm.
- A Blockchain network accommodates smart contracts. A “smart contract” is computer-generated, and the obligations that each party must fill lie in the code, which is immutable and therefore cannot be changed. Unlike a standard contract that lists the terms of a relationship, which are usually enforceable by law, a smart contract enforces a relationship with cryptographic code. The benefits are multiple: Speed of execution, real-time updates, error-free, incorruptible, immutable, no third-party involved, cost-efficient.
The features listed above clearly show that Blockchain technology promotes transparency, which in turn can only contribute to increasing trust among participants. And trust in any forms of business exchange or transaction is key to create long and lasting relationships among trading partners. Now you may ask me, “But Nick, what happens if a bad data is pushed to the Blockchain and it cannot be deleted?” That’s a valid question. A stand-alone data that is pushed to the Blockchain from a centralized system in the cloud, for example, can be rejected if it does not fall within a pre-established acceptable range. The range is mentioned inside the code of the smart contract that’s triggered and then executed when applicable. In fact, smart contracts offer another layer of data cleanliness.