You must have heard about Blockchain and how this disruptive technology can be the next milestone in the history of innovations, but you probably don’t understand what it is all about and how it can reinvent cloud, and open up new prospects for the business.
The terms ‘Bitcoin’ and ‘Blockchain’ go hand-in-hand, however, they can’t be used as synonyms. Bitcoin is an innovative digital currency, created and held electronically, which are produced by people. Blockchain is the underlying technology that drives Bitcoin protocol. It is a digital ledger, similar to spreadsheets, containing a constantly growing list of transactions called ‘blocks’. These blocks are sequentially connected to each other and once the block is in the chain, it cannot be removed – thus making a permanent database which is decentralized, where multiple distributed parties come to a consensus.
Big organizations across various domains are making significant investments to explore blockchain and how it can push the boundaries for doing business.
To create private blockchains and handle the processing required for blockchain-based applications, the cloud will play a major role. Blockchain requires high-speed bandwidth and fast computational systems which are easily available on the cloud. Cloud vendors are working hard to meet the demand of the customers to help achieve their goals. Let’s look at some key things which blockchain requires and what cloud can provide:
1. Network – Data centers of cloud vendors have high bandwidth and transporting the data is feasible across the peer-to-peer network on which the blockchain resides. With higher speed and reliable systems in the network, transactions can be processed rapidly. This minimizes the time to do business around the globe from days to minutes.
2. – You might need to process the transactions and come up with some statistics. With highly efficient computational systems, and several features like big data, machine learning and other computational concepts available in the cloud, a transaction can be processed within seconds. Plus with the option of scalability, you have everything in your hand for on-demand resources and you only pay for what you use.
3. Storage – Cloud storage is a service which everyone has used or, I should say, uses every day, whether you know it or not. With Storage-as-a-Service you can provision on-demand storage capacity and make your data available worldwide. This makes it a lot easier for blockchain-based applications to access and store the data seamlessly. When the data is processed, it is either returned back to the customer or kept to be reused at a later date. With cloud storage available, you can retrieve the data from anywhere, anytime and do whichever operations you wish to perform.
Let’s take the following example to understand how the above mentioned three things can go hand in hand – No entity can deny that some activity is not performed by them, as the users in the network can verify the integrity and time of the operation on the blockchain. Everything which happens to the data – transport, processing, and storage, is stored in the blockchain. Thus bringing accountability, reliability, security, transparency and traceability into the picture. With the huge capacity of storage available, you will never run short of space for your data.
Cloud vendors are already at war to have a piece of market share in this huge industry and blockchain’s cutting-edge technology can determine who comes on top. With the Blockchain-as-a-Service model sprouting, it will become easy to develop blockchain-based applications by just using APIs. Everything else will be taken care of by the cloud vendors.
So, the cloud can provide the base for blockchain-based applications and blockchain can change how business is done over the cloud.