IBM to launch largest blockchain project yet

Rage Comment : IBM has been committed to the development of technology applications for the entire industry and is also very active in the field of blockchain. This time, in order to solve the problems existing in the enterprise itself, it decided to develop an internal dispute resolution solution. This solution is currently the largest blockchain project. Relying on blockchain technology, it is committed to changing the existing internal transaction process traceability system, tracking the complete process of products from materials to factory in detail, in order to eliminate financial disputes caused by system deficiencies, thereby releasing relevant funds. It is expected that the system will be implemented in September this year, and it has been decided to sell it.

Translation: Annie_Xu

IBM Global Financing (IGF) hopes its blockchain solution can free up funds frozen in disputes between clients and partners, creating more available liquidity.

The IBM project, called International Business Machines Corp., is expected to be implemented as early as September and is the largest commercial use case of blockchain to date.

The project, which helps finance departments resolve disputes with clients and partners and educates the market about blockchain companies and their technology, has made IBM one of the largest organizations to move from limited technology testing to real-world business transactions.

The system is expected to release $100 million of IGF funds that are frozen by trading disputes at any given time. Blockchain technology is said to remove middlemen and make many markets and functions more efficient.

The business involves 4,000 suppliers, financing customers and partners, and their annual transaction volume reaches 3 million transactions with a total value of $44 billion. Jerry Cuomo, vice chairman of IBM's blockchain department, said that every year, order or transportation problems will cause the wrong number of computer parts, resulting in 25,000 disputes.

Jerry Cuomo

Currently, it takes an average of 44 days to resolve these issues, and employees need to use six or seven independent applications to trace the previous process, and sometimes they need to contact banks and other relevant parties. Recording transaction information on the blockchain ledger makes this tracing process more efficient and may be more accurate than IBM's existing processes. This new system runs parallel to IBM's existing financial applications and uses customs codes to collect key points in transactions, such as order time, delivery time, payment time, etc.

IBM conducted several months of experiments and reduced the process to 10 days.

Cuomo declined to estimate the potential savings, but said making each step faster would free up money more quickly. "We don't let that $100 million get tied up," he said.

IBM eventually plans to sell the internal dispute resolution software as part of the IBM platform, but has not yet determined when or how much it will cost.

More than 40 major banks and financial companies are testing blockchain to digitally track asset ownership for security and transparency; but few have made it past the trials themselves; the reason is uncertainty about blockchain scalability and how existing regulations will treat blockchain transactions. Last year, Nasdaq began to launch a new type of exchange where private companies can issue securities and bonds using Chain Inc's blockchain technology.

Now some companies are beginning to pay attention to the potential of blockchain to simplify supply chain processes. Toyota Financial Services uses it to track the flow of auto parts between factories and countries. Recently, the startup Everledger announced that it will jointly develop a blockchain system with IBM to manage the transaction chain of high-value commodities, such as the entire process of diamond mining and trading.

IBM is considering using blockchain technology internally, including to track parts from suppliers, said Arvind Krishna, IBM senior vice president and head of research.

Don Tapscott, CEO of the Tapscott Group and co-author of "Blockchain Revolution," said companies with large supplier networks are excited about blockchain, which envisions a permanent, searchable record of everything in a supply chain that can be seen back to its origin.

"When you want to buy a burger, you can know all the information about that burger; what feed the animals were fed, what antibiotics they were given, how the food moved through the supply chain."

Rather than worrying about cows, a company like IBM might closely track the computer chips it makes to ensure they are not pirated. If a product eventually breaks, for example, the company will be able to more easily identify the source of the defective product.