teknowlogy´s top IT trends for 2019 – 10/10 Distributed ledger technology
Blockchain technology has made tremendous progress over the past year. This includes, for example, new Enterprise Ethereum Alliance specifications that open up blockchain for corporate use and promote interoperability between different blockchain protocols. Added to this are production-ready frameworks of the open-source projects Hyperledger Fabric and Hyperledger Sawtooth. In addition, protocols such as MultiChain and IOTA promise more transaction processing capability. All implementations mentioned have the common denominator that they are designed for the implementation of closed ecosystems based on distributed ledger technology, i.e. private blockchains. This also eliminates the complex and power-hungry consensus methods of public blockchain applications.
Most noteworthy are innovations that move away from the pure blockchain model and create new, pragmatic solutions for use in the business environment. IOTA is an example of this trend, since this protocol, which is predestined for IoT applications, is not blockchain technology, strictly speaking. It works with directed acyclic graphs instead of chained blocks for better scalability and performance.
The Lightning Network, which has introduced off-chain transactions to the Bitcoin environment for the first time, follows similar pragmatic approaches. The idea behind this is not to store each item of information in a blockchain, but to initially consolidate transactions outside. Off-chain solutions are also increasingly being tested in private blockchains, to be able to store and delete sensitive personal information in compliance with data protection laws, for example.
With that in mind, the term distributed ledger technology (DLT) is better suited than blockchain to give a common name to the many different innovations in this field.
All of these developments mean that serious solutions based on DLT are already arising in many companies. Activities are particularly evident in industries such as logistics, commerce, banking, and pharmaceuticals, where the traceability of physical and virtual goods is an important part of the core business. PAC expects many new DLT-based production systems in 2019.