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Blockchain technology (or distributed ledger technology) is a mechanism in which transaction records (in a ledger) are mutually verified, agreed on, shared, and managed by participants (such as computers and nodes) on distributed locations on a computer network. Developed as an underlying technology for bitcoin, blockchain technology is expected to transform the structures of conventional systems.
Blockchain systems are:
Blockchain configurations are classified into the following types, based on the nodes that approve transactions:
|Permissionless blockchain||Permissioned blockchain|
|Trustless||A consensus must be reached among mutually untrusted and anonymous participants.||A certain degree of trust can be expected because the identity of the participants is known.|
|Finality*2||Strict finality is not required. Approximate finality is acceptable.||Strict finality is required.|
|Performance||Performance cannot be guaranteed.||A certain level of performance is required.|
Blockchain technology provides value in the following areas:
Blockchains are expected to provide another advantage through the implementation of smart contracts.
A smart contract is a way of automating contract fulfillment management. For example, a smart contract can be used to automate the execution of predefined processing if specific conditions are met regarding a contract or transaction. By using a program that includes conditions to ensure that transactions and contracts recorded on blockchains go into effect, fulfillment management can be automated, and a variety of tasks can be seamlessly linked. For example, smart contracts could be combined with IoT technologies to automatically lock a car if the owner falls behind on the loan payments.
Hitachi has been making efforts in the following three areas
Hitachi believes that blockchain technologies can be used to restructure our social infrastructure. As a participant in the Hyperledger program, an international collaborative program for standardizing blockchain technologies, Hitachi is engaged in the development and standardization of blockchain technologies. Hyperledger was established by the Linux Foundation, a nonprofit organization based in the United States, and over 197 (as of December, 2017) companies and organizations are currently participating in the project.
Hitachi has been a premier member of Hyperledger since it was established. Hitachi made significant contributions to the release of Hyperledger Fabric 1.0*1 in the summer of 2017, by stabilizing operations, preparing the application development environment and user documentation, and reviewing proposals from other participant companies.*2
Toshiya Cho of Hitachi, Ltd. is a governing board member of the Hyperledger project, and is deeply involved with the running of the Hyperledger organization. Mr. Cho is the head of the Financial Innovation Center, Business Planning Office, Financial Information Systems Sales Management Division at Hitachi, Ltd.
By utilizing our experience in configuring core financial systems, Hitachi has identified functions that need to be added, and we are currently focused on examining and developing those functions for financial institutions. Most of all, Hitachi is focused on investigating and developing the advanced security functions that are required for financial systems.
Hitachi also established the Financial Innovation Laboratory for FinTech R&D in Sillicon Valley, U.S.A. This laboratory is intended to drive R&D efforts in the area of financial blockchain technology and accelerate collaborative creation with financial institutions.
Leveraging expertise in a wide range of business domains, Hitachi has developed the following prototypes to implement proof-of-concept (PoC) testing of services that link different types of businesses by using a blockchain.
This blockchain implementation will enable stakeholders other than the non-life insurance companies to do the following:
This prototype ensures that contract details and status information (for example, information about whether a purchase order has already been placed or received) is recorded and shared by using blockchain technology. This streamlines the sharing of such information among relevant parties. Because the workflow is synchronized with the status of the contract, and because the smart contract automates and ensures payment reservation (deposit) and payment execution, this prototype can also help ensure the proper execution of clerical tasks and streamline those tasks.
This prototype enables manufacturers of the final products, tier 1 parts manufacturers, and tier 2 parts manufacturers to carry out both trace-back and trace-forward investigations. Trace-back investigations examine problem reports to identify parts to be recalled, while trace-forward investigations identify parts to be recalled and examine the expected results of the recall.