Hold on, What’s Blockchain?

If you are a beginner to the world of blockchain/smart contracts, Mark Russinovich (CTO of Microsoft Azure) has an excellent talk with plenty of demos that cover the basics of blockchain, smart contracts & enterprise use cases.

 

Cryptokitties

Cryptokitties is a decentralised application (DApp) built on Ethereum, an open-source blockchain. Players breed and trade digital kittens with some kittens trading for $100,000 or more. Cryptokitties was one of the very first applications to execute smart contracts at scale on the Blockchain.

What are Smart Contracts?

Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralised blockchain network.

 

In Cryptokitties, smart contracts are used to facilitate the trade of kittens between players. To date, over $6 million of kitten trades have been executed via smart contracts. More on the CryptoKitties smart contract here.

Enterprises & Smart Contracts

Aside from the immutable nature of blockchain, the ability to execute smart contracts are a key attraction for enterprises as it allows for the codification of business contracts reducing transaction costs and improving traceability.

 

Some of the common use cases for enterprise smart contracts are:

• Trade finance
• Digital music rights
• Supply chain management
• Real estate sales
• Provenance

Trade Finance

Trade finance has seen the lion’s share of investment and interest from enterprises, mainly large multi-national banks, as they stand to benefit the most if the current archaic paper heavy processes that underwrite international trade give way to a trading system wherein terms of trade and payments are executed autonomously via smart contracts between multiple parties on an immutable ledger i.e. the blockchain. The efficiencies gained from such a trust-less autonomous system would be immense. Although there are several efforts underway to create just such a system, most have not moved beyond proof-of-concepts.

DBS Bank, Agrocorp International & dltledgers

However, three firms based out of Singapore seem to be buckling the trend. DBS Bank, commodities trader Agrocorp International and blockchain technology firm dltledgers recently announced their production-ready end-to-end commodities trading platform.

 

To date, they have on boarded 124 traders, 4500 farmers (mostly in Australia) and completed 2400 global trades worth over $750 million in trade volume! The introduction of the platform has significantly reduced paper-based transactions, improved lead times for payments and provided real-time visibility of trades. The platform, itself, has been built over Hyperledger Fabric, an open-source blockchain framework, hosted by the Linux Foundation.

“We see this platform as a huge step towards wider adoption of blockchain in trade finance. dltledgers was an early Hyperledger member and today they play a leadership role in our trade finance working group. It’s a pretty amazing story!”
– Brian Behlendorf, Hyperledger Executive Director & Apache Software Foundation co-founder

Aside from the trade finance platform, dltledgers also offers an extended supply chain management solution. Couple this with the commodities trading platform and dltledgers seem to be well on their way to leveraging the promise of blockchain to improve international trade for the better!