Trust, security, consensus and provenance are the key elements of ‘blockchain’, noted Raju Buddhiraju, Commercial Bank executive general manager.
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
It is a chain of blocks that contain information, aligned in a chronological order.
Making a presentation on ‘Blockchain Dynamics’ at the Qatar Trade Summit Tuesday, Buddhiraju said, “All stakeholders need to be on Blockchain to make it functional.”
Presenting an example of a blockchain with a ‘smart contract’, he said it can eliminate middleman (third party) and help improve timelines for SMEs.
This architecture can be harnessed to facilitate peer-to-peer payments, manage records, track physical objects and transfer value via smart contracts.
Buddhiraju gave an example of a fish supply chain and presented a scenario, where a batch of fresh fish is given a serial number, then tracked from source, to transport company, to destination.
IoT devices monitor temperature while in transit and report on average and maximum temperature reached.
“Once the shipment has been accepted at the destination, funds are automatically transferred to pay for the fish. No third party involvement. And this will improve payment timelines for SMEs and transform businesses,” Buddhiraju said.
Blockchain can also establish whether a trade transaction is genuine or counterfeit.
The economic value of counterfeiting has been estimated by International Trademark Association at $2.3tn by 2022.
According to the World Economic Forum, blockchain could account for as much as 10% of global GDP by 2025. And Gartner says the value added will be $175bn by 2025 and $3.1tn in 2030.
Buddhiraju, however, noted that government regulations are required for ‘smart contracts’ to be legal globally.
“Currently, only one country – Estonia has legalised smart contracts” he noted.