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Dr. Alexander Samarin wrote this blog about blockchain and BPM. How big of an impact do you think blockchain will have on BPM?

Tuesday, February 02 2016, 09:51 AM
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  • Accepted Answer

    Tuesday, February 02 2016, 10:35 AM - #Permalink
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    Basically a Blockchain-like protocol allows the implementation of decentralized trust for things like ledgers, audit trails, transactions records etc. The idea is that you don't require a central party in order to implement this sort of functionality. An escrow/title agent in a real estate transaction is a classic example of a centralized party enabling functionality like this.

    So basically it boils down to the simplicity but dependency-on-a-central-party vs. the complexity but lack-of-dependency-on-a-central-party. The complexity (and unfamiliarity) of protocols like Blockchain should not be underestimated. Recently, some very key players in the blockchain ecosystem have come out saying that Blockchain is in big trouble. This is a recent article from one of the original developers of Bitcoinhttps://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7#.iuwuta20kwhich gives reasons why Bitcoin is in big trouble (hint: it has to do with Blockchain). These problems could be solved with a new protocol or various other fixes. But this result is after many years of an uncertain experiment. How much trust will there be the next time around?

    So, with all that background I guess I can see Blockchain or a Blockchain-like protocol for BPM having some LIMITED utility where the advantages of non-reliance on a central party outweigh the complexity and uncertainty characteristics of something like Blockchain. What might be examples of this? Unsurprisingly, moving money is the classic use case because of the desire of many to have currency not controlled by any central bank. But does this motivation apply to other sorts of transactions?

    In Dr. Samarin's cited article you have examples like contract negotiation. Something like this could easily be accomplished with centralized trust providers like Docusign or TMail21. For these central trust providers you need have the following characteristics

    1. You need to trust the central provider
    2. The central provider needs to be available at the time of the transaction

    In particular, the central provider does not need to be available after the transaction is completed. For example if the central provider went out of business after your transaction was completed your transaction is still provably valid as it would have been digitally signed by the central provider's private key and the public key is known to all. This removes a huge problem with these central trust systems. It is akin to the real estate example where the title company went out of business after your house buy/sell transaction. There is no doubt about the validity of your real estate transaction.

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  • Accepted Answer

    Tuesday, February 02 2016, 11:33 AM - #Permalink
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    On BPM in general, none.
     
    On the design, execution and managament of processes in specific industries; possibly huge.
     
    It doesn't change the why? and what? of processes, but has a big impact on the how? and who? of processes.
     
    Having said that, it can of course also delete the whole need for the Why? of some middle man processes.
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  • Accepted Answer

    Wednesday, February 03 2016, 04:55 AM - #Permalink
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    Yes, Emiel, the business value of BPM will be considerably increased by blockchain technology (please don't mix it with various cryptocurrencies applications built with blockchain technology). Expected directions are:
     
    1) Unbreakable machine-executable processes will enable “unbreakable contracts” or “smart contracts”. Any contract is a process (or a set of interconnected processes) in which its participants must know, understand and prescrve their rights and responsibilities. Thus it is mandatory to guarantee the consistency & completeness & correctness (e.g. separation of duties) of such contract, its integrity, its exact & non-biased execution, full traceability and transparency, etc. For example, a lot of B2B, B2C and B2E contracts are executed by one of their participant right now. Where are guarantees for other participants?
     
    2) A lot of existing business practices to establish reliable business relationships (as a “bounded trust” – “trust but verify” or “doveryai no proveryai") will be seamlessly transferred to the digital way of working. My example of “digital escrow” and “digital judge” is one of them. The same for a “digital lawyer”.
     
    Important that there is no need for ”centralized trust providers” as proposed by Ranjit. Current escrows, lawyers and judge are decentralized executers of orders, i.e. laws and contracts, (at least in Switzerland).
     
    3) Enhancementof the enterprise security by adding to infrastructure, data and application layers of security a currently missing business layer of security (enabled by unbreakable machine-executable processes). See refs below.
     
    Thanks,
     
    AS
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  • Accepted Answer

    Wednesday, February 03 2016, 05:03 AM - #Permalink
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    I honestly admit that I am not up to speed with this technology. Its complexity is way above my head.

    That being said, are we ready to give up the trust in a single, visible, relatively transparent central authority (e.g. national banks, states) and lend it to some single, insufficiently explored, central technology solution (e.g. the blockchain protocol)?

    Are we overall safer when dealing with individual entities that seek to corrupt individual transactions OR when dealing with global entities with sufficient computing power (emerging rogue states or technology companies wealthy enough to distort markets around them) that may seek to corrupt a single global system of transactions?

    • Walter Bril
      more than a month ago
      I think you hit the nail pretty nice on it's head here. It boils down to further improving the blockchain technology where individuals simply cannot distort anymore. AFAIK in the case of Bitcoin it only happened once that a 51% attack almost succeeded. This must not be underestimated IMO.
    • Dr Alexander Samarin
      more than a month ago
      To separate blockchain as technology and applications which use this technology, e.g. bitcoin with its blockchain-protocol, please have a look at https://en.wikipedia.org/wiki/Merkle_tree (which has no typical bitcion-around hype).
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  • Accepted Answer

    Wednesday, February 03 2016, 05:05 AM - #Permalink
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    Yesterday I attended a Blockchain related training actually... In November last year, Olivier Rikken wrote an interesting article about this subject (see enclosed URL) where he explains that these worlds are actually closer than you might think. Worth to read! Anywhere were workflow logic is used (e.g., smart contracts) you want to have insight in your processes. BPM provides insight, Blockchain is the technology.

    The fact that technology leads to different or changed processes is not new of course; in the case of Blockchain however, this might just be a bit more disruptive... The fact that the middle man for example is eliminated does not really change the E2E process IMO.

    • Dr Alexander Samarin
      more than a month ago
      The cited URL implies that "smart contracts" capability is part of blockchain. But if we separate blockchain as technology and blockchain-based application then "smart contracts" capability is a very limited version of BPM (just automated processing similar to BPEL). As we know very well, although a happy-path may be fully automated all other paths may be considered as well.

      Thus I tried to combine BPM and blockchain as technology to avoid reinventing the wheel.
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  • Accepted Answer

    Wednesday, February 03 2016, 05:54 AM - #Permalink
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    Agree with Emile and Alexander - and I think the scaleability issues will be resolved - a distributed ledger makes a lot of sense and a real challenge to established BPM concepts which rotate around orchestration. The other size of the process coin is choreography (which is woefuly misunderstood). It becomes about how you choreograph the participants (think ballet rather than shunting rail cars).

    Some example blockchain stories worth checking out from the press over the last few days in the attached links:

    The blockchain is not useful just for finance. It is an almost incorruptible digital ledger that can be used to record practically anything that can be digitized: birth and death certificates, marriage licenses, deeds and titles of ownership, educational degrees, medical records, contracts, and votes. It has the potential to transform the lives of billions of people who lack bank accounts and access to the legal and administrative infrastructure that we take for granted.

    I suppose my point is that the implications of #blockchain go way beyond #fintech and disrupts anything needing trust/audit

     

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  • Accepted Answer

    Wednesday, February 03 2016, 09:50 AM - #Permalink
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    It's not the technical complexities or the potential. It is, will be, about money and control and for that reason my answer is "not gonna happen" and I'm good with "We'll see" on this one.

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  • Accepted Answer

    Wednesday, February 03 2016, 10:54 AM - #Permalink
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    Interesting discussion from which I learn. Sure I have heard of this blockchain but when I researched it seemed linked to the crypto currencies and frankly immediately dismissed!. Fact is the global currencies are about to revert to asset backed from what is called fiat the unsupported printing of money which has left us all in a bit of a mess! So bitcoin was tried but with very mixed results and highly unlikely will be adopted by businesses.

    Having said that the concept of the secure "smart contracts" as articulated may make sound sense but the payment mechanisms will have third parties called bankers ......but their way of working will change as the global currency reset is implemented helped by release of historical wealth that will ensure a prosperous future for us all ....not the few!

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  • Accepted Answer

    Friday, February 05 2016, 02:37 PM - #Permalink
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    Excellent question from Dr. Alexander concerning blockchain, and how this technology could be used alongside BPM. (And Dr. Alexander's blog post on blockchain is well worth visiting -- cf. above).

    So, what could be the impact of a "distributed, 'incorruptable', low-latency universal ledger"?

    In the context of the IoT and business model evolutions we are seeing now, including especially the rise of low-cost payments platforms, blockchain could be a key enabling technology. Among other things, Bitcoin can be considered as just a POC for blockchain, and maybe not even a very good one at that.

    Here's an interesting discussion of the intersection of blockchain, technology, business and economics, from April 2015, by Vitalik Buterin, wunderkind founder of Canadian blockchain startup Ethereum:

    blog.ethereum.org/2015/04/13/visions-part-1-the-value-of-blockchain-technology/

    • Dr Alexander Samarin
      more than a month ago
      Thanks for ref John in which Vitalik gave a definition of blockchain "A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong cryptoeconomically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies." Certainly, BPM is a big part of this understanding of blockchain.
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