Blockchain: The Light Hidden Under Bitcoin's Bushel

Blockchain has the potential to help telecom vendors increase security and value to their solutions -- if they are willing to invest in its development.

Simon Sherrington

May 12, 2015

3 Min Read
Blockchain: The Light Hidden Under Bitcoin's Bushel

Whether or not Bitcoin continues to gain greater acceptance within the world's financial community, and whether or not it continues to gain ground as a currency that is actually used to trade electronically by real people, Bitcoin has contributed a new idea that is exciting entrepreneurs: blockchain.

Bitcoin is based on blockchain, which is not a technology but a concept. It involves recording digital transactions (including ownership of digital and physical assets, identities of people and assets, and transactions involving those assets) within a public ledger, which is maintained by a community. The idea is that blockchain enables transactions to take place remotely, without the need for trust between the participating individuals. Transactions are recorded only when multiple members of the community agree that the transaction is valid, and the ledger includes mathematical proof (based on hashing and encryption) that prevents subsequent alteration of the public records.

Blockchain is being baked into several new digital services and concepts. While these were initially targeted at the financial services business, ideas have spilled out into other sectors -- one of which is telecom. Startup companies are developing transaction clearing, security, mobile payment and Internet of Things (IoT) solutions all with relevance to telecom operators and vendors.

Barriers to use of blockchain within the telecom industry have really started to come down. With the introduction of blockchain-as-a-service solutions from the likes of IBM and Microsoft, and the emergence of a vibrant community of businesses offering tools, processes and platforms to enable swift creation of and experimentation with blockchain concepts, companies can test their ideas with minimal risk.

This has opened up the market for operators and vendors to introduce blockchain and blockchain-based technologies and services into their business processes, their product portfolios and their business offerings. Heavyweight telecom investors, including Cisco, Ericsson, NTT, Orange, Samsung and Verizon, have been putting their research and development (R&D) and venture capital (VC) dollars where their ambition is. We are already at the stage where companies in the telecom industry -- and particularly those with broad digital service ambitions -- need to take a good hard look at what blockchain could offer.

Heavy Reading's latest report, "Blockchain & Its Impact on the Telecom Industry," analyzes the state of the blockchain solutions and services market, looking at the types of applications in development. The report specifically considers what this means for companies in the telecom business. Further, it assesses the impact that different blockchain applications will likely have on telecom network operators and vendors by considering implications for cost cutting, revenue growth or supply chain evolution.

It reviews the value chain for blockchain-based products and services, considering where operators and vendors are best-placed to get involved. Finally, it profiles nine innovative players active in the development and supply of relevant blockchain platforms, products or services, showing how their activities are relevant to telecom operators and vendors.

— Simon Sherrington, Contributing Analyst, Heavy Reading

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About the Author(s)

Simon Sherrington

Simon has nearly 20 years' experience of tracking, reporting on and providing consultancy about technology markets, and has spent a large proportion of that time focused on the telecoms sector. He has worked with service providers, equipment vendors, government departments and regulators, telecoms end users and content providers, and still finds himself continually surprised by others' ability to innovate. Simon writes about a wide variety of topics – with current favourites including carrier Ethernet, virtualization, big data and next generation mobile services.

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