UPDATED 13:30 EDT / MARCH 23 2017

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The new business disrupter: How IBM is taking blockchain all the way to the bank

If bitcoin is the new currency then blockchain is the new bank. IBM Corp. recently made investments in developing blockchain technology and is working with the open-source project Hyperledger to advance the concept of blockchain throughout the enterprise.

“Blockchain is all about trust in business transactions. There is an opportunity for the first time for companies to share some information in a secure fashion, [and] in addition run some workloads and business processes on top,” said Ramesh Gopinath (pictured), vice president of blockchain solutions and research at IBM.

While at IBM InterConnect 2017, Gopinath sat down with John Furrier (@furrier) and Dave Vellante (@dvellante), co-hosts of theCUBE, SiliconANGLE Media’s mobile live streaming studio, to talk about the trending transformation of blockchain due to IBM’s participation in the Hyperledger project. (*Disclosure below.)

IBM is harvesting the potential of blockchain

The concept of using blockchain to support more than bitcoin began about two years ago for Gopinath. His team found there was a unique opportunity to use blockchain technology for business transactions. When the open-source Hyperledger project moved forward, IBM began seeing it in dramatically different new light from the underlying blockchain in bitcoin or any other platforms.

The platform, built on requirements gathered by working with hundreds of clients in financial services, supply chain and the public sector, to name a few, provided levels of confidentiality, privacy and permissioning (permissions/roles) that led to Hyperledger’s success.

According to Gopinath, there are three significant investments that IBM is making with blockchain. The first is its contribution to the open-source Hyperledger project. Second, the company is further developing its Blockchain High security business network to protect against misuse of privileged user credentials. Third, the company is investing in enterprise production-ready blockchain solutions using Hyperledger.

“I have been shocked at the pace at which this has been moving both from the point of the technology itself [becoming a mature technology layer]. There are a number of financial institutions talking about production deployment early next year,” Gopinath said.

Transparency creates trust

In today’s technology environment, everything has the potential for intrusions. However, what makes blockchain stand out is a high-level of security in the blockchain distribution. Gopinath, who admitted that nothing is ever 100 percent hacker-proof, pointed to the elements that make it extremely difficult.

Blockchain technology is dependent on a chain of transactions that has more than one interacting stakeholder. There are no third-party interactions. One party cannot make a unilateral action on the blockchain without consensus, he explained.

“The entire workflow is captured as a sequence of transactions that are registered on the blockchain,” Gopinath stated.

Once it becomes a part of the blockchain, tampering is next to impossible for two reasons. The first is the transaction holds a fingerprint within the block. It is immutable. Secondly, if someone changes any one part of the blockchain after the transaction, it affects the entire blockchain by making all transactions invalid.

Gopinath revealed that the high level of mathematical cryptography and the number of people that would have to collude in any change within the blockchain make it difficult to penetrate.

The possibilities of blockchain technology in the enterprise are endless. There are many benefits to reducing overall costs and transactional costs. Gopinath discussed the various use cases and how blockchain is disrupting businesses.

“From the point of view of all the use cases the value to the ecosystem is clean and obvious,” he said.

Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of IBM InterConnect 2017. (*Disclosure: SiliconANGLE Media’s theCUBE is a media partner at InterConnect. Neither IBM nor other conference sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE

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