Blockchain technology – if you were to believe in some of the hype – could change the world as we know it…
Realistically however – and in the right circumstances – Blockchain oriented approaches to effectively dis-intermediating existing business processes from the likes of centralized repositories, escro account providers and similar – could provide immense opportunities for firms to become more efficient and cost effective.
Various consortia exist where people with the appropriate technical, business, legal etc., expertise from various firms work together to create workable and practical solutions – all the while resisting the nirvana as promised by certain marketing and/or wannabe fundraising oriented folks.
On the “big-league” side of things (think Amazon, Microsoft and IBM) – and ironically in many ways – a “centralized approach” is nonetheless being promoted whereby potential users of their Blockchain services are being encouraged to join-in with others and entrust the big guys to handle the technical environment side of things.
Where do they differ in their approach?
Fundamentally – Amazon’s (AWS) and Microsoft’s (Azure) approach works upon a distributed x86 architecture basis – whereas IBM are (via Hyperledger) of course adopting a mainframe basis.
To be fair – Microsoft’s recent announcement of a ‘Confidential Consortium’ (“Coco”) approach which will eventually (promised for sometime in 2018) provide “…[is] designed to work with any ledger or operating system…aimed to make it easier to build enterprise networks quicker and more securely when using any distributed ledger…” holds some promise.
IBM’s approach however seems to have already stolen the march somewhat over AWS and Azure by providing centralized updates, Global 24/7 Support – and – the ability to run analytics on the Hyperledger itself – all the while making use of the tremendous processing power and practically zero downtime of mainframes.
On balance – and IMHO – the IBM offering in this regard currently provides a far greater degree of comfort in choosing which platform provides better reliability and support.
That said – the various offerings continue to evolve and need to be constantly monitored to ensure that your final decision as to which platform you choose proffers the optimum solution to your firm’s needs. Recent legal spats (think Ripple versus R3 Ethereum) clearly demonstrate the potential difficulties that could arise when things go awry.
In the Ripple versus R3 Ethereum case – a lawsuit was filed alleging “…an attempt by Ripple to terminate an agreement signed in September last year which gave R3 the right to purchase up to 5 billion XRP’s for $0.0085 per unit at anytime over the next two years…”
XRP’s are currently trading at around $0.02 per unit – representing a 2000% gain on R3’s investment….
What would have happened if the parties had used a Blockchain oriented approach involving the use of so-called “Smart Contracts” instead?
Would the matter still have proceeded to the Courts – would a Hard or Soft Fork in the Blockchain be required? Is a “Smart Contract” truly legally binding – or still subject to later appeals?
Further – on the Regulatory side of things Blockchain – Deutsche Börse’s Stefan Teis, SVP, business & product development said that “…real-life applications of DLT in the financial sector will not become more widespread until regulators are convinced that the technology can be made compliant with the existing regulatory framework…
…prior to widespread application in the financial sector, the technology has to advance and a greater level of technological standardization has to be achieved. The current fragmentation of protocols and providers will prove to be a challenge. Implementation also needs understanding, recognition, and approval by regulators which will evolve over time.”
All this and more needs to be hammered out before firms can make qualified and sensible choices as to how they might (or maybe not) implement Blockchain technology – and if so – with whom.
As of now – my money’s on the Hyperledger approach.
Editors Note: This blog was penned by the all around legend that is Allan Zander CEO of Datakinetics, if you don’t follow Allan on Twitter you should!