The financial industry has long discussed the benefits of adopting blockchain – or distributed ledgers – in its operations. Storing records in the cloud are still a major concern, as FIs try to figure out how to tap into the technology, but IBM’s announcement last week may go some way toward removing those concerns.
IBM launched a blockchain service on Friday that allows developers to test and launch applications in IBM’s own “tamper-proofed and trusted” cloud and Docker, a distributed app platform for developers. The goal is to reduce the time it takes for banks to adopt the ledger technology, by taking away the security concerns. Will this move shoot blockchain into the mainstream? No, Jerry Cuomo, vice president of Blockchain IBM told Bank Innovation.
It is still early. You will see production cases this year but that doesn’t mean you will see companies running transactions except as a secondary rails. I call it production on training wheels. The question is, when do the training wheels come off and we start conducting trillions of dollars in trade on Blockchain? It is like asking when will folks become comfortable letting cars drive themselves through town without anyone in the front seat ready to take the wheel?
As part of the new service, the Big Blue also released a security framework for running blockchain networks in the cloud. The main takeaway? “That you need belts and suspenders when it comes to blockchains that handle real people’s assets and private information,” Cuomo said. “It is not enough to rely on consensus.”
With the opening of the IBM Garage this month in New York City, the company is aiming to accelerate the development of apps for asset trading in a secure environment. “It is awesome. It’s like being able to be “out of the building,” as the lean startup saying goes, without leaving the building,” Cuomo said. “I’m surrounded not by other IBMers but by tons of startups and other companies that work in the shared space.”
Bank of New York Mellon is already signed up to test the full potential of the “garage” here in New York.