IBM Wants to Do Smart Contracts with Bitcoin’s Blockchain Technology

IBM, the decades old technology corporation that has name recognition across generations, is wading deeper into the mining pool of bitcoin blockchain technology. The machining company, which has long since refocused on facilitating international business, was one of the first large corporations to recognize the potential of blockchain technology. Arvind Krishna, senior vice president of IBM Research, understands that the blockchain is a novelty. He told the Wall Street Journal:

Blockchain, as a technology, is extremely interesting and intriguing.

The specific point of intrigue, and potential profit, that IBM wishes to pursue is the world of smart contracts. They wish to create a blockchain that helps its users, whether a Chinese supplier or an American bank, settle transactions with the speed of the Internet, and the security of the blockchain. Smart contracts could be used to update the world of settlement, which is still essentially living in a pre-computer era.

IBM Is Becoming Adept at Blockchain Technology

Last year, IBM revealed a blockchain technology project called Adept, which used the Bitcoin blockchain with the internet of things cloud of interconnected devices. They envisioned a world where the blockchain could be a cheaper back end for whatever purpose. This project is completely separate from Adept, IBM clarified. In recent history, IBM has also helped bring other open source projects to the mainstream. In the late 1990s, Linux gained massive popularity in business applications because of the Apache web server. IBM has long spent hard earned money on research and development. Their research team is currently stripping down the original Bitcoin source code to remove the currency aspect and to make sure that contract details remain private. They also wish to make it easy for businesses to “upload” their unique parameters for their own smart contracts. Krishna understands that open source projects aren’t usually world changers; however, the upside on this type of research could be huge.

He continued:

I want to extend banking to the 3.2 billion people who are going to come into the middle class over the next 15 years,” he said. “So I need a much lower cost of keeping a ledger. Blockchain offers some intriguing possibilities there.

But They Aren’t The Only Ones

Part of the reason that open source projects seldom make it to the mainstream is due to the competitive environment from which said projects are always borne. Since Bitcoin’s release several years ago, thousands of “forks” have been released. Many have since drifted into obscurity; while others, such as the IBM projects, have garnered immense media attention ahead of their planned release. Other blockchain technology projects that promise smart contracts include Counterparty and Ethereum. Other companies, such as Overstock and Symbiont, are also looking to create blockchains for b2b settlement use. Specifically, Overstock seeks to create a new digital bond platform where the trade is the settlement. Counterparty is built on top of the existing Bitcoin blockchain while Ethereum uses its own blockchain which will be secured by a new form of Proof of Stake as opposed to the Proof of Work used by Bitcoin (and Counterparty). IBM’s blockchain will need to be secured by proof of something, and we all eagerly wait to see what that something is.

Smart contracts will be most useful in countries where regular contracts have hidden costs when requiring enforcement. In areas where corruption is rampant, such as China, smart contracts could be more attractive to the myriad of international companies that don’t have the expertise to navigate the domestic court system should some sort of business transaction go wrong. It doesn’t matter which blockchain technology project is first to bring easy-to-use smart contracts to the general public, it doesn’t matter which one is the one that lasts. The fact that smart contracts will become a staple of b2b, and maybe even b2c, life is a testament to the futuristic world that we live in. Even if the project that succeeds doesn’t use the Bitcoin blockchain explicitly, everyone will know where the inspiration came from.

What do you think about IBM’s new blockchain project? Will they be able to beat out existing projects? Is there room for all of them? Tell Bitcorati your thoughts with a comment below!

Image from PixaBay.

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Profile photo of Caleb Chen

Digital Currency Advocate

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