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How IBM Is Using Blockchain Technology

IBM, the 109-year-old technology giant popularly known as Big Blue, has been at the forefront of Distributed Ledger Technology (DLT), or simply blockchain technology. In 2017, IBM (IBM) ranked number one among blockchain technology providers based on an enterprise survey by Juniper. Over the years, IBM has developed solutions based on blockchain and worked with clients to best serve their industry-specific needs and provide end-to-end implementations.

Here’s a look at IBM’s blockchain initiatives during 2020 so far.

COVID-19 has disrupted every system around us. In the wake of supply chain disruptions, many have reiterated the need for more transparency and visibility across the supply chain. As the cases of coronavirus began to rise, there was a surge in demand for medical equipment, supplies, and PPE. IBM stepped in with its approach to combat COVID-19 with technology solutions. In April, the IBM Rapid Supplier Connect—a blockchain-based network designed to help government agencies and healthcare organizations identify new, non-traditional suppliers who have pivoted to address the shortage of equipment, devices, and supplies needed for COVID-19 relief efforts—was announced. The network has been joined by Northwell Health and The Worldwide Supply Chain Federation.

In June, IBM announced the release of IBM Blockchain Platform version 2.5, which improves on IBM Blockchain Platform version 2 in terms of security, usability, flexibility, and development speed. 

After months of lockdown and stay-at-home orders, the gradual re-opening began with everyone getting prepared for a “new normal.” Anticipating the need for people to present their health status at different locations such as offices, stadiums or flights, IBM leveraged blockchain to make the process more secure and trustworthy. In August, IBM introduced the Digital Health Pass which enables individuals to present their health status so they can return to a physical location. Individuals can manage their information through an encrypted digital wallet on their smartphone and control what they share—and for what purpose—while organizations can set criteria (test results, temperatures, etc) to determine responses for each health status they review.

In the world of finance, in an interesting application of blockchain technology, the Bank of Thailand recently launched the world’s first government savings bond on IBM blockchain and cloud technology. Leveraging blockchain technology on the IBM Cloud, the platform allows investors to benefit from speedy bond issuance, reducing the process to two days from the previous 15 days. The efficiency provided by blockchain also reduces operational complexity and the overall cost of issuing bonds.

A total of $1.6B was issued within two weeks. In the past, the sale of government savings bonds was often a complex and time-consuming process, involving duplicated validation steps and manual reconciliation prone to data errors.

“Bank of Thailand’s success with the government savings bond project is the latest example of how blockchain technology can redefine the way businesses operate by simplifying complex processes resulting in fast, transparent, secured and efficient multiparty collaboration,” said Patama Chantaruck, VP for Indochina Expansion and MD of IBM Thailand. 

Current Status

A Deloitte survey from 2019 highlights the growing popularity of blockchain among organizations, with 84% agreeing that the technology is scalable and will eventually become mainstream. As blockchain adoption moves steadily forward, it needs a closer look from investment perspective for retail investors. David Furlonger, distinguished research vice-president at Gartner, said, “Even though they are still uncertain of the impact blockchain will have on their businesses, 60% of CIOs in the Gartner 2019 CIO Agenda Survey said that they expected some level of adoption of blockchain technologies in the next three years.”

According to IDC, the blockchain spend will witness some decline in 2020 as compared to the pre-COVID-19 forecast scenario led by the reductions in IT spend and bleak economic growth in recent months. IDC expects blockchain spending to grow at a five-year compound annual growth rate (2018-2013) of 57.1% (compared to 73.2% estimated earlier) with worldwide spend reaching $14.4 billion by 2023. Gartner estimates that worldwide IT spending will decline by 8% compared to 2019.

According to LinkedIn research, knowledge of blockchain is among the top 10 most in-demand hard skills for 2020. According to research, “Blockchain’s novel way to store, validate, authorize, and move data across the internet has evolved to securely store and send any digital asset. As companies explore how to take advantage of this technology, they have a huge need to build this skillset, as it is extremely difficult to hire for.”

Final Word

Despite a slowdown during the pandemic, blockchain deployments saw a moderate acceleration. What’s more important is the fact that companies like IBM are leveraging blockchain technology to provide a solution to some real-world problems especially during COVID-19.

Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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