Blockchain and Cognitive — the IoT Dream
We have been talking about the most advanced and ground-breaking technologies of the era where digital business is collaborating with digital intelligence in our recent posts. We hence thought of coming up with yet another interesting blog post on how blockchain and cognitive computing can work together to bring in a paradigm shift across all industry spectrums. So far, this powerful combination has been put into practical applications in only finance (we’ve discussed a use case later in the post). And the end results have made the thought leaders realize the unprecedented potential and they are trying to find synergies in other industries as well.As per Gartner, by 2022, smart contracts through blockchain technology will be used by more than 25% global organizations. Click To Tweet
When it comes to the future-proof technologies that can revolutionize the way enterprises function the blockchain and cognitive computing analytics top the list. And when the strategic initiative of putting these two technologies together in practical applications, we’re witnessing the onset of a bleeding age. Let’s take a look at how some industries can leverage this powerful combination and disrupt their business goals.
Blockchain and Cognitive Computing: Understanding the Basics
Before we delve into how these two technologies can be exploited together, let’s try to understand them separately in simple terms.
What is cognitive computing?
Cognitive computing analytics counterfeits the human thought processes in a computerized model. This technology implicates self-learning systems that leverage data mining, NLP (natural language processing) and pattern recognition to replicate the way the human intelligence. Cognitive computing creates automated IT systems that are capable of solving problems without requiring human assistance.
Use case of cognitive computing
Challenge: Delivering accurate and practical investment recommendations to financial executives
Solution: Investment executives have always been challenged in gathering and understanding the mammoth-sized information on the current market scenario and existing investment plans. The task is even more strenuous when they have to use this information to make real-time and proven decisions about where and when to invest client funds in a highly volatile market.
Cognitive computing comes to rescue in such situations. With the help of this technology, reporting and analytics capabilities can be enhanced and can be utilized for the private equity firms and small hedge funds. Cognitive computing technologies such as Watson are being leveraged to determine the existing market intelligence and risk profiles, debunk tens of millions of documents and financial profile data. With such crucial information, this technology then enables the financial managers to make better investment decisions.
What is blockchain technology?
As per Wikipedia,
A blockchain is a decentralized, distributed and a public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.
Let’s see how blockchain works in banking
If a bank operates on a distributed ledger, every member would have a copy of the ledger. And whenever someone makes a purchase, every other member gets notified. Each member would then verify the transaction and add it to the ledger. The added record is called a “block”. These blocks get added forming a chain – a logical sequence of transactions. Blockchain ensures complete surveillance, as there’s no centralized authority that could manipulate the record. Therefore, whenever a ledger is hacked, the other ledgers can easily verify it.
Blockchain & Cognitive— the “IoT Dream”
By now we have a succinct idea about these two future-proof technologies. Let’s get back to the gist of this post – how do blockchain and cognitive work together? Since we’ve only just scraped the basics on the potential of both the blockchain and cognitive computing, there’s a lot to discuss and share the plausible advantages of combining these advanced technologies. One of the largest areas for the potential insurgency is in tandem with the progressive Internet of Things.
Thought leaders across several industries have started realizing how the IoT-enabled devices can help them automate and improve their business grades, and how the blockchain and cognitive can be exploited together to fix the existing limitations on scaling and security with centralized systems.
Tech giants like IBM are already experimenting by integrating their cognitive technology – Watson IoT platform along with blockchain, thereby enabling their clients to make data disruptive. Most of the data collected by the IoT-enabled devices is “dark”, which means the data is ideally stacked away in storage and isn’t used for anything. Cognitive computing is capable enough of processing this unused and forgotten data, whilst obtaining significant insights that can be used in strategic planning and performance measurement.
Now the obvious question that you might be wondering –
How does the blockchain technology fit into this equation of IoT and cognitive computing?
We all know how blockchain has been proved to be a game changer in the world of technology. Blockchain can be laddered up to scale IoT usage and for providing security. The data collected by the connected devices can be extremely sensitive and valuable to organizations. Data breach is the last thing a company would want to happen. Blockchain technology can be leveraged here to create a distributed ledger for logs containing crucial data. Furthermore, blockchain also helps companies to identify and understand anomalies and issues and exactly where and when these problems occurred.
Why does IoT require blockchain and cognitive?
2 years down the lane, there will be an estimated 30 billion Internet-connected devices across the globe. With the present digital transformation solutions available for storage and data processing, enterprises won’t be able to manage these devices seamlessly, provide they don’t integrate cognitive systems and the blockchain into their business processes. There are so many use cases where businesses can benefit by harnessing the “dark” data and letting blockchain and cognitive computing systems work together with IoT to obtain a win-win outcome. Cognitive computing, blockchain technology, and IoT can work in tandem to automate and oversee several industry systems for greater optimization enhanced security and reduced waste.
Case study of blockchain and cognitive in IoT
It’s a known factor how financial institutions and banks have started leveraging the results-driven blockchain technology to disrupt their businesses. Here’s one example of how blockchain and cognitive computing can work together in the financial industry.
India-based YES Bank has combined cognitive computing and blockchain so as to enable their clients with a secure and streamlined experience. The bank pays the vendors in real time seamlessly with the help of blockchain. The distributed ledgers make the transaction history transparent, thus bringing in trust for each other to the involved parties. YES bank made use of the Watson technology to access the customers’ data and respond to their queries accordingly.
Many financial institutions have also joined the rat race and are redefining the way they work by leveraging these future-proof technologies. That being said, it is confirmed the tech-oriented industries including finance are going to be completely different by 2030.
Do you really think that the blockchain and cognitive computing can be combined together to reinvent the present industry spectrum? Do you think there are any risks involved in integrating those two disruptive technologies in financial services? As always, your opinion is vital for us, so please feel free to share them in the comment box below.