Is the blockchain enterprise-ready? Consensus 2016 panelists air it out, I shared the high points from a Microsoft-facilitated panel at Consensus 2016.In my piece
I pursued the pros/cons of enterprise blockchain apps, including the issues of platform and scale. Later, I cornered one of the panelists, Victor Wong, CEO of BlockApps, to learn how his company is blazing ahead on enterprise blockchain apps. Specifically, BlockApps provides the tools to develop apps on Ethereum. Wong told me that most of this year's Consensus Hackathon participants used the BlockApps platform to build their apps. So why has Ethereum achieved buzz as a way to build enterprise blockchain apps? And what about the criticisms of blockchain's enterprise readiness? Here's what Wong had to say.
The roots of an Ethereum blockchain startup
Jon Reed: When did you realize blockchain was going to have a big impact on your career?
Victor Wong: I was approached by BlockApps' CTO Jim Hormuzdiar about two years ago. We had been talking broadly about cryptocurrencies in general. I didn't have that much interest in Bitcoin, but he said, "I really want you to take a look at this thing called Etherium."
Reed: And you reaction?
Wong: In my previous startups, I launched several companies in China. What I learned is at the launch of an application platform, you have the opportunity to be on equal footing with everyone else. When I thought about Etherium that way - as an application platform - that got me really interested.
Reed: So what made you decide to join BlockApps and build an Etherium development platform?
Wong: My BlockApps founders are all way smarter than me, but I'm pretty technical. We tried to build an application on Etherium, and we couldn't. We thought, "Okay, here is an opportunity for us. Let's see if we can find a way to make this accessible for normal developers." Our initial thinking was that we would make it for people to build applications on the public network, but the demand from the enterprise has been great. We've helped enterprises get onboarded into the Ethereum ecosystem through private blockchains.
The Etherium value proposition
Reed: Give me your elevator pitch for enterprises.
Wong: We make it easier to develop, to deploy, and manage Etherium-compatible blockchains. We have some additional functionality added on top to make it more scalable, and more transparent for enterprises. We take that time from months down to minutes. You do one click on Azure - or some of our other partners' platforms - and you are up and running that day
Reed: The confusing part for me is: Ethereum already is a platform. So why do we need BlockApps?
Wong: Unlike Bitcoin, there is not one core Ethereum protocol that everyone uses - there are several. We're the first group that created our own implementation of Ethereum outside the foundation. We own it. We own our stack all the way from the Etherium client to the developer tools. When I say "full stack," I mean we go all the way down from building and deploying your first blockchain, connecting it to your existing systems, and building blockchain applications on top of it.
Reed: And what has been the response?
Wong: We have a huge pipeline. The interest in Etherium generally has been massive. The ones we've announced are John Hancock, and we have signed partnerships with Microsoft. We are the first certified blockchain solution provider on their Azure platform.
Blockchain for the enterprise - addressing criticism
Reed: One of the criticisms of blockchain from an enterprise perspective is that it's just a slow distributed database. You made an interesting point: if there is any truth to that, it is countered by the fact that those databases haven't dealt with the trust issue that blockchains address.
Wong: Exactly. You've got to look at blockchain as a collaboration tool. What you are benchmarking against is not these super back-end databases that you are using. What you are comparing blockchain to is the compliance, operations and reporting departments that are having to aggregate data from these databases, analyze them and figure out what is, in fact, the single source of truth amongst all these data sets. Everyone talks about big data, but not too many people talk about bad data, and that is what these groups effectively take care of. Blockchain can help resolve that on a more automated fashion.
Reed: Because blockchains are, by definition, validated at every step, there is (almost) no such thing as bad data, and that is where the trust factor comes in.
Wong: Right. One of the classic database errors is synchronization, so you have one database that says one thing and you have another database that says another thing. That is a fundamental issue that blockchains resolve.
Reed: Some critics bring up the scale issue. They point out there is a struggle in the Bitcoin community around why and how this should scale. As you know, enterprises get obsessed with the issue of scale. Do you think this is an issue for enterprises?
Wong: As systems move towards production, it is definitely an issue. There are many ways to approach this. We have one architecture we have been developing to specifically handle this problem. The other problem with blockchains is that most blockchains are public, which means that all the information is public. Everyone has equal right to see everything there. Now, in an enterprise setting, you don't want all of your partners to necessarily see all of the terms and agreements between you and everyone else. We are developing an architecture that kind of manages both these problems.
Reed: Is it fair to say that Etherium provides more of the basis for scale, and then you're fine tuning and enhancing that?
Wong: The comparison I like to make is that Bitcoin is like a calculator. It is a single purpose implementation for value transfer that does that purpose really well. Etherium is a generalizable application platform that can be used for many different applications. We are taking that general platform, and putting features on top of that which make it scale better, and more suitable for enterprises to use and adopt.
The wrap - BlockApps use cases
Reed: Have you seen any really interesting news cases? Obviously nothing is at massive scale yet, but what stands out?
Wong: I think the biggest, most interesting use cases are all around identity. We did a hackathon over the summer, and one person did a horse registry, so you could see ancestry of every animal. Of course, this can be broadly applied to any livestock. We've seen things like diplomas - basically anything of value that needs to be verified. Then, of course, there is the financial industry. There are many, uses cases there, mostly around risk reduction and improving settlement times. Some of the energy implications are interesting too.
Reed: The conference hackathon winner was energy-related...
Wong: We're in the process of dealing with some very large energy companies. Most of those are around localized power generation. There is more efficiency in creating localized markets that could effectively be automated. Someone with solar panels could share power with you, and you could work out an arrangement to pay each other for those. IP for artists is another interesting area. We're talking to a bunch of companies in that space.
Reed: Where do you want to be a couple of years from now - what is the best case scenario?
Wong: We look at blockchain as a specialized database, so we like to think of ourselves as the Oracle for blockchains. We'd like to be a core infrastructure provider to provide companies in many industries the tools to build their blockchains.
Reed: Oracle for blockchains - nice. A real heavyweight. Intimidating rivals.
Wong: (laughs) Yeah, exactly.