IBM is Eating its Own Blockchain Food

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One of biggest challenges for the adoption of the blockchain has been the absence of large scale applications beyond bitcoin. Even though many industries are pioneering blockchain-based solutions, we are still missing large scale solutions that validate the promise of the decentralized ledger. IBM now wants to address this by implementing a solution for its Global Financing arm that leverages blockchain technologies to resolve disputes with customers and partners.

IBM has been one of the enterprise software incumbents to invest heavily in blockchain. Recently, big blue open sourced its Hyperledger implementation of the blockchain and also launched a blockchain as a service (BaaS) series of services as part of its Bluemix cloud. By leveraging the blockchain as part of the dispute-resolution system for IBM Global Financing, IBM will provide one of the biggest implementations of blockchain technologies and will bring a much needed validation to the space.

To get an idea of the scale of the problem IBM is trying to solve using the blockchain, we should look at some numbers. IBM’s blockchain-based dispute resolution will handle 4000 suppliers and customers and process about 3 million transactions per year worth about $44 billion. Based on historical figures, IBM expects that the new blockchain solution will handle about 25,000 financial disputes and free up about $100 million in capital tied up at any given time in transaction disputes. In initial tests, the blockhain solution has been able to reduce the time required to solve a dispute from 44 days to 10 days.

Beyond the scale of the operation, IBM’s blockchain-based dispute-resolution solution will provide strong validations for IBM’s Hyperledger technology as well as for the BaaS and private blockchain models. While technologies like BaaS and private blockchains provide a logical value proposition, many blockchain-purists remain skeptical about the fact that those technologies haven’t been as battle tested as the public blockchain. For now, IBM make it clear that they are pretty serious about blockchain technologies.

Written by

CEO of IntoTheBlock, Chief Scientist at Invector Labs, Guest lecturer at Columbia University, Angel Investor, Author, Speaker.

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